Biggest barrier to growth of payment technology is fraud potential
The value of non-cash payments in the UK will reach £1.44 trillion by 2026, new research shows. This is a 26% increase on 2016’s figure of £1.14 trillion, and there is set to be 19.1 billion contactless transactions per year within a decade, according to a study from global law firm, Paul Hastings.
The research, conducted in association with the Centre for Economics & Business Research (Cebr) and YouGov, examined current attitudes of businesses and consumers towards alternative payments and their potential use of future payment methods.
Further 2026 forecasts from the UK research include that 68% of all transactions will be non-cash transactions, up from 55% today, and also that 74% of businesses will accept alternative payment methods, a leap from 2016’s figure of 41%
Ben Regnard-Weinrabe, partner in the Global Banking & Payment Systems practice at Paul Hastings, based in the London office, said: “We have a fantastic array of new payment methods at our fingertips, whereas once the options were limited to cash, cheques, card, and bank transfer. You can leave your payment card at home, and pay contactless through Android, Samsung or Apple Pay; if you shop online you may use PayPal, paysafecard or Zapp instead of MasterCard or Visa; if you want an alternative to your mobile banking app, perhaps you’ll use Money Dashboard or Mint; and for electronic payments that are just like paying by cash – instant and anonymous – bitcoin and other emerging digital currencies are an option.”
The research also identified the biggest barriers to growth of payment technology, revealing that 53% of consumers in the UK said that a reduced risk of fraud is the feature they would most like to see in alternative payment methods, more so than accessibility, customer service or competitive rates of interest.
Regnard-Weinrabe continued: “Nonetheless, as this paper shows, there are still challenges to the success and adoption of emerging payment methods. They include a need to continue building customer trust in new technologies, and a regulatory framework that is having to respond fast to the changing dynamics of the market and emerging cybersecurity threats in a way that, hopefully, will not have a detrimental effect on the user experience or impose unnecessary barriers to new entrants.”
