30 March 2016
Digital Inclusion - The Key to a Cashless Tomorrow
Technology is transforming the way we spend, save and bank for the better. But is Britain ready to become a cashless society?
The latest figures from the Payments Council show that, at 52% of the total, electronic payments overtook the use of notes and coins for the first time in 2014. It expects greater usage of debit card, contactless and mobile payments to push cash volumes down by a further 30% over the next 10 years. However, not everyone is ready to embrace new payments technologies.
We need to understand why and what can be done to change that.
An age old problem
Age is a major factor when it comes to adoption of new payment types. According to the Lloyds UK Consumer Digital Index 2016, nearly two-thirds of the “digitally excluded” are aged 60 or more.
Not all older Britons are wary of digital payments, of course. Recent figures from over-50s specialist Saga show that one in five Brits over the age of 50 regularly uses a contactless debit or credit card. But they are lagging behind younger consumers, many of whom have left traditional payment methods behind.
According to a recent PayPal survey, 34% of Millennials see credit cards as “old school”, and about 70% believe traditional card payments are insecure compared with digital alternatives. That’s why the industry needs to promote the benefits for consumers of all ages – particularly those in their later years…
More, not less, secure
More than six in 10 over 60s are “worried about privacy and security” in the digital world, the Lloyds report reveals. Many younger consumers also have concerns about theft and fraud. But digital payments are much less risky than carrying cash. And making payments using a phone or watch, for example, is more secure than using a card that could be stolen by fraudsters.
Once people understand that, I can’t see any stopping them.
A cheaper way to spend
Everyone likes saving money – whether they are 18 or 80. So increasing awareness of how new payment technologies can improve your wealth is another vital step towards a cashless society.
Lloyds’ researchers found that adults who “refuse to go digital” are losing an average of £744 a year due to missing out on digital discounts. Collectively, they calculated that digitally and financially excluded Britons could save an incredible £3.7 billion by taking advantage of online deals. Motivating stuff!
Save time as well as money
Since the introduction of contactless cards, consumers have collectively saved over 90 years of queuing at the checkout, according to the British Bankers' Association.
In a world where time is money, that’s huge.
Getting around on public transport has also become much quicker and easier thanks to digital payment systems. About 99% of Transport for London passengers now use Oyster, prepaid tickets, contactless payment cards or concessionary tickets rather than cash.
If we can get to the same stage with payments, our work here is done!
No more PINs
We live in an ageing society – Office of National Statistics figures show that the percentage of over 65s shot up by 47% between 1974 and 2014 – where more and more people are living with conditions such as dementia and Alzheimer’s disease. For those affected, remembering a PIN is simply not an option.
That’s why I believe the death of the PIN could become one of digital payments’ biggest selling points.
Some industry players are trying to force people to adopt new payment types by refusing them access to traditional alternatives. Certain banks, for example, have hit the headlines for refusing to issue non-contactless cards. But making people WANT to use digital payments by raising awareness of the many benefits – particularly those designed to cut crime – is the only way to truly move forwards.
Until we manage that, a cashless tomorrow will remain nothing more than a dream…