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Mobile payments: the really popular tech that no one wants?

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Mobile payments are the most popular technology… that no one wants – depending on which data you look at.

Two weeks ago, research by IDEX Biometrics revealed that mobile payments are almost as unpopular as cheques. Today, figures from analyst firm Cardlytics suggests that mobile payments such as Apple, Google and Android Pay in the UK has quadrupled over the last two years. 

According to Cardlytics, as a proportion of total payments, mobile transactions in the UK have jumped from 1.3% in Q3 2016 to 5.6% in Q3 2018, representing an overall increase of 331%. Compared to this time last year, mobile payments have increased by 60%.

By contrast, IDEX says only 3% of people are using it. What gives?

According to Cardlytics it all depends who you ask. Cardlytic’s research shows that the biggest beneficiaries of growing mobile payments are quick-service merchants who have introduced contactless payment methods. This includes quick-service-restaurants (11.3%), coffee shops (11%), public transport (11%) and bars and pubs (9.25%).

This reflects that mobile payments are used more readily at merchants that people visit on a daily basis and wish to pay more expediently, while less popular amongst bigger-ticket, one off purchases. 

IDEX, by contrast, focussed more on how people use cards and whether they would ditch them for mobile. While the vast majority said no, it would seem that those that use contactless mobile payments regularly are big fans.

It also depends on age. Talk to any millennials – and younger, many millennials are quite old now – and you find that they are big fans of Apple Pay and Google Pay as it is quick and easy to use.

Those that are au fait with the likes of Apple Pay will also know that they £30 contactless limit doesn’t apply and so in many cases Apple Pay is more convenient than cards.

And this is the key: convenience. Cards only replaced cash as they are more convenient. Mobile will only become a mainstream payment mechanism if it is more convenient than cards. Being limitless for contactless and being secured by biometrics – increasingly important as Chip and PIN ages, it is now 12 years old in the UK – will increasingly sway users to pay via mobile.

Duncan Smith, Commercial Director at Cardlytics, sums it up: “The huge growth in contactless payments has been well documented, and we’re now seeing mobile payments making a big contribution to that growth, often at the expense of cash. Having a broader view of consumer spending in categories that were previously cash-heavy allows us to provide more relevant rewards at places where consumers prefer to shop. This is also a big opportunity for banks because by offering these rewards through their native channels, we are helping to build loyalty and increase share of wallet.”

Image: Fotolia

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