Two thirds (65%) of people are carrying less cash than a year ago, thanks to the growing use of contactless cards and mobile payments.
That’s according to new research conducted by payments provider Paysafe, which found that more than half (55%) of consumers in the UK expect to give up using cash for shopping in the next two years.
A quarter (24%) of consumers surveyed for the Lost in Transaction study already use mobile wallets and 12% use cryptocurrencies for payments.
Of those who use mobile wallets, 84% said that paying by mobile is more convenient than using cash and 77% think it is more convenient than using contactless.
Contactless has paved the way for this new era of payments, Paysafe said, with three out of five consumers regularly using it for payment. The mass acceptance of contactless is facilitating more compatibility between retailers and emerging payment methods at point-of-sale, including digital wallets and smartphone apps.
Commenting on the research, Oscar Nieboer, Chief Marketing Officer at Paysafe, said: “Although slow to establish itself, contactless is changing the landscape in how the public views cash and began its evolution into digital formats. Today, we are seeing the emergence of a cash-free society, people have more ways than ever to spend cash online or offline, and this challenges businesses to reimagine the shopping experience to allow for behaviours and payment models unthinkable a decade ago. They need to look at the next wave of disruption in payment and get ahead of the curve with younger demographics by introducing new payment approaches.”
However, the report also highlighted the hurdles that need to be overcome before digital payment methods are adopted more widely, with 68% of consumers worried about the security of contactless, and 58% concerned they will be charged the wrong amount when using it. When it comes to payments via mobile wallets, 29% of people said they worried about their phone being stolen and 28% did not even want to take their mobile out to pay. This is despite nearly two thirds (63%) saying they are increasingly confident about using their mobile phone for shopping.
Paysafe stressed that businesses will have to take a diversified approach to payment, accommodating both traditional and emerging methods.
“Those merchants who seize the opportunities provided by this new normal will be best placed for the next big wave in omni-channel retail,” the company concluded.