The growth of online shopping has been a key factor in transforming the way consumers pay over the last decade, new research from the Payments Council has demonstrated. Now the council predicts the coming decade will all be about paying over the mobile phone.
The Way We Pay research from the Payments Council, out today, brings together the big trends in payment since 2001. And it found that while three out of five one-off payments are still small cash transactions, debit cards are now used for the majority of payments – debit card spending has risen almost fourfold since 2001. Online shopping is one key factor in that. In the future, says the research, cards may also seem archaic as more people use their mobile phones to pay.
Adrian Kamellard, chief executive of the Payments Council said: “The quiet revolution in payments has enabled the creation of whole new industries such as e-shopping, it has changed our behaviour, and it has reduced transaction costs, and increased the speed and efficiency with which we can all pay each other.”
Looking ahead, he predicted “even faster change” as the use of mobile phones to pay becomes commonplace. “The 2000s were the decade of the debit card,” he said. “The 2010s are likely to be the decade of the mobile phone. Just as we can’t imagine how we ever did without the internet, many people will soon wonder how we used to be so dependent on cash and cheque.” He added: The next ten years will see even faster change. It’s easy to imagine a future where we merely pat our pockets for our keys and phone. The wallet could become a historical curiosity.”
The report predicts that contactless payments will become more routine, and will soon be made not only via debit or credit cards but also through mobile phones. By 2021 consumers spending is expected to grow by 45%, but the use of cash is expected to have fallen by 1% by that date.
The Payments Council’s research also found that 58p in every retail pound is now spent in supermarkets, up from 46p a decade ago. Clothing shops have increased their share of shopping spend by more than two-thirds, but still only account for 3% of retail purchases.
Some £58bn is now spent on entertainment, 60% more than in 2001, with spending in restaurants and cafes almost doubled, but spending on going for a drink in the pub has grown by only 7% since 2001.
The research follows hard on the heels of findings from Barclaycard that showed shoppers spent 12.8% more on the internet in 2012 than in 2011. Nearly a fifth of all retail transactions, said the credit card company, were made online.
