Better late than never, it has come to pass: we are officially nearly a cashless society. In its latest annual payments survey, the British Retail Consortium (BRC) revealed that cards payments now account for more than 50% of payment transactions. This is pretty momentous news – for the first time in history people prefer something other than real money to pay for things.
We have been approaching the cashless society for decades. Ever since the inception of the credit card, it has been mooted that we would soon be done with coins and promisery notes and would be swiping, tapping and, thanks to NFC, wafting our way to payments before 1976 was over.
Well now we have. Forget that ‘cash’ isn’t actually money, but a note telling someone to move money around on a ledger and so is no different to what cards and contactless payments do, this is a monumental shift.
And it has massive implications for retailers. The bulk of these non-cash payments are of course cards, but buried within the details of the BRC report is the fact that contactless cards and contactless mobile payments are helping to drive up this shift from notes to taps.
For retailers this means that investment in contactless card readers is paying off. It also helps save them time – a contactless payment is some 7 seconds quicker than a card payment in the old fashioned way, and so there is a saving there too.
But does it beat cash? On the face of it no. Cash is often the easier way to pay – you pull it out your wallet and hand it over and wait for the change. It is quicker than a card payment (possibly comparable to a contactless payment) but overall not a game changer.
But what is really interesting – and why retailers should be pushing for contactless and mobile payments – is that ditching cash could well save them a lot of money.
Handling cash – collecting it, counting it, sorting it, storing it, securely transporting it and banking it – costs a lot of money: comparable to the cost of the percentage charge levied on a card or contactless transaction. Removing this from the retailer’s bottom line would be significant – more significant that the savings accrued by each contactless tap being the quickest way to pay.
There is a downside, however, in that contactless in many places is still limited to £30 or below. Some retailers are quietly lifting this in some stores, but they don’t share that they are and are very edgy about doing so.
This is where mobile comes in. Mobile technology is playing an increasingly important role in the in-store experience, with Qmatic’s latest research revealing that 19% of consumers are now comfortable making payments with their mobile phones, and using mobile checkouts. However, the research also reported that over half of consumers (53%) have never experienced any of this technology within British stores.
Qmatic’s research also found that, out of 100 retailers surveyed, 49% see mobile optimised checkouts as the innovation most likely to make a significant impact on the customer experience, above other technology such as virtual and augmented reality.
But it has to be part of a wider strategy to mobilise the store. While the development of this technology may have significant implications on retail within the next five years, to maximise the potential, retailers need to implement in-store mobile technology throughout the customer journey, rather than just at checkout.
The shift to card payments over cash and the fact that a third of those are contactless paves the way for mobile instore to become a real player. If the £30 contactless limit is lifted then suddenly retailers have a massive incentive to mobilise their stores – get them to pay with their mobiles and you can get them to work backwards and use their mobiles from when they arrive.
Linking this into mobile loyalty schemes, augmented reality and IoT and things start to get interesting. Soon we will be cashless – then the next step is to eliminate payments all together.
