The Strategist

Cash era is coming to the end: Mobile payments are attracting increasingly more users

04/20/2016 - 16:22

British supermarket chain Co-op (around 4,000 stores) published results of a study on payment options at its stores. Now 65% of the payment is made in cash, but the dynamics of mobile payments allows the researchers to conclude that mobile payments will overtake cash and cards by 2025.
The study reported that, despite the high-tech companies’ loud statements on launches of new mobile payment services, cash still remains the main mean of payment. 65% of payments in shops of the British supermarket chain is made in cash. The study says that this proportion has not changed for the past two years. It is reported that the main reason for the mobile payment’s weak use is the low level of trust. The mobile payments network limits one transaction to £ 30, but buyers still prefer to use mobile only when making small purchases. The average size of a mobile transaction is £ 8.66, while the average size of transactions made using credit card is £ 18,16. The interviewed buyers told that there are three confusing things in the mobile payment. These are concerns about the safety of such payment; doubts that such a payment will be easier than the payment card; commitment to the traditional payment of the goods with the direct help of the cashier.

Despite this, the researchers made a bold prediction that most buyers may refuse wallets and cards in favor of mobile payments within the next ten years. The company explains that by the dynamics of mobile payment volume in its stores. In the last 12 months, the mobile share has tripled, surpassing the mark of 11 million transactions per month. Only in February, the growth of mobile transactions was 15% (1.4 million) compared to the previous month. According to 65% of the interviewed buyers, their smart phones would become the main payment option by 2025. CIO at Co-op Food Cheryl Marshall said: "Consumers need time to start trusting modern technology. This is why cash is still the main method of payment. At the same time, we believe that mobile payments will exceed the volume of payment cards and cash by 2025."

The researchers asked to comment a representative of the Royal Mint, which did not agree with their predictions. "People have spoken about a approaching end of the cash era for a long time, yet it is still the main means since people want to use something reliable, proven and safe. Cash is still the most common way of making payments for British consumers ", - said the organization’s representative.