A new study published by Experian reveals that a third of the UK population (33%) believes credit and debit cards will no longer be the preferred method of payment in 2020, as paying with a smartphone will take over.
The Banking Moving Forward study provides a valuable insight into what expectations
individuals have of lenders and how they view the financial landscape. It examines how people bank now and how they expect to bank in the future, and is a useful guide when developing services that meet the needs of their customers.
The findings show that while cash and card payments still dominate, people believe that alternative methods of payment such as smartphones will become more widely used over the next five years. In this timeframe, 67% of respondents feel cash will decrease in popularity, while two in five (41%) think there will be a decline in the use of credit and debit cards as they currently are.
However the main reason smartphone payments are not currently the preferred method of payment is a fear of fraud. Almost half of people surveyed (46%) fear their identity may be stolen online while 60% of smartphone users said they had no malware protection on their devices, leaving them vulnerable to hacking by cyber fraudsters. Organisations that make it easier, while secure, for their customers to transact with them will have the most rewarding relationships.
When asked about how other forms of payment could fare, four in five (80%) said that secure online payment platforms, such as, for example, PayPal, that let people shop using their debit card, credit card or bank account without sharing their financial details will become more popular by 2020.
Looking towards 2020, 14% of the population believes that biometrics, such as retina or fingerprint scans, could also become commonplace and two in five (44%) say they would be prepared to make payments via biometric scanning. A fifth (19%) would consider paying for goods and services using voice authentication.
“People will certainly be faced with more choice in years to come with the payment methods and providers they choose. Their decision will ultimately be based on the ability to pay for something, securely, anywhere and at any time at their own ease and convenience,” says Derek Garriock, Head of Business Solutions, Experian UK and Ireland.
“Security is a key concern for many individuals, who may be willing to adopt new ways of paying but have not yet done so, even amongst the younger generation. This is understandable considering that one in six adults has fallen victim to a cyber-attack via their mobile device.”
How you can better protect your smartphone device:
Smartphones can hold a wealth of information, from cached passwords to online accounts and apps, contacts and other personal information. As paying for goods and services by smartphone increases, people should try to follow these best practices to ensure they are protected:
- Always use a home screen lock on your mobile device.
- Don’t store account names and passwords or digital pictures of your passport.
- Remember that public Wi-Fi networks are riskier than private networks, so be careful with the information you access and share when out and about.