Treasury News Network

Learn & Share the latest News & Analysis in Corporate Treasury

  1. Home
  2. Payments - Receipts at POS
  3. Card Payments at POS

‘The Future of Payments’ - How payments in the UK will evolve in the coming years

Payments UK, the payment industry’s new representative body (launched in June 2015) is developing a head of steam. It has announced new members* and has just commissioned and published an important new report by Consult Hyperion on ‘The Future of Payments’ in the UK.

The report, which gives Consult Hyperion’s view - from their unique perspective as an electronic transaction consultancy - on how we will pay in the future. Payments UK commissioned this opinion paper ahead of its World Class Payments report, in which it will set out a vision of what payments of tomorrow could look like if built on clear evidence of all types of customers’ needs.

Key ‘The Future of Payments’ report findings

  • over the past five years the debit card has consolidated its position as the nation’s preferred way of paying for things, with use of both cash and cheques continuing to decline
  • the demographics of who is using cheques means their future looks far from certain, i.e. cheques may disappear 
  • Bitcoin will not have a significant role to play in the future of payments in the UK
  • drivers of change will come from technology, regulatory, and business/consumers:

     
          Source & Copyright©2015 - Payments UK

  • the natural conservatism of people, particularly when it concerns their personal finances holds innovation back, e.g. contactless is only starting to take off six years after launch

Likely future developments in next five years:

  • there will be significant growth in non-cash payments, payments will become faster and cheaper, and there will be greater transparency for customers around the detail of their transactions – such as information about any charges
  • much of the development over the next five years to come from two main sectors: the traditional payments organisations, such as banks, who will innovate to protect their market position and to better serve their customers; and from fintechs, seeking to become or support new market entrants
  • phone becomes the primary means of paying for things and managing their various accounts
  • no ‘death of cash’ any time soon. Consequently we expect to see a continuing presence on the high street of ATMs. But we do anticipate improved integration between the mobile phone and the ATM, so that you can request cash from your mobile banking app, which will connect to the ATM wirelessly for the delivery of cash
  • the role of ATMs in financial inclusion (people who don’t have bank accounts) will also ensure their longevity; people with cards and limited budgets will continue to find cash useful in budgeting, an oft-overlooked function of notes and coins.

The future Consult Hyperion envisage is summed up by this scenario:

  • an 18 year student who wants to book her coach ticket home for the weekend, but when she comes to pay she finds the price has gone up as the weekend approaches and she can no longer afford it. So she Whatsapps her mother, who is out shopping and away from her laptop. Her mother uses her smartphone and her mobile banking app to Paym some money directly into her daughter’s bank account, and the student buys the ticket. So she can make it home for the weekend after all.

Increased information available to customers

Consult Hyperion stressed how far more information will be expected from banks and retailers on:

  • bank charges
  • precisely what I bought, how much it cost etc. just as they get when shopping online.

And that this information is available in whatever financial app consumers choose to use.

*Yorkshire Building Society with Earthport to follow shortly. Volante Technologies has also joined as an associate member. As a result, Payments UK will have 38 full members and 23 associate members. Also American Express, BNY Mellon, Metro, PayPal, Tesco Bank and Virgin Money have all joined the Payments UK board


CTMfile take: Extra information in a manageable form on each payment is going to be a vital differentiator between retailers and service providers.

Like this item? Get our Weekly Update newsletter. Subscribe today

Add a comment

New comment submissions are moderated.