According to the UK Payment Council, the majority of payment transactions conducted by British consumers will be made through mobile devices at the expense of debit and credit cards by 2021. In commenting on the prediction, Adrian Kamellard, chief executive of the Payments Council said, “The 2000s were the decade of the debit card; the 2010s are likely to be the decade of the mobile phone.”
While mobile payments in the United Kingdom is still in its early stages, by 2014, 90 percent of all bank accounts should allow for mobile payments following Barclays “Pingit” scheme launched last year. That was a resounding success with more than 120,000 people downloading it within five days of its release. It forced Barclays to increase the amount of money that could be sent in an individual transaction. “It is easy to imagine a future where we merely pat our pockets for our keys and phone,” comments Mr. Kamellard.
The Payments Council’s prediction is based on noticeable changes in consumer preference payment instruments in recent years, particularly with traditional payment options such as cash and checks. In the UK and worldwide, both cash and checks have sharply declined in use over the past decade, with consumers paying for smaller transactions with cash or check. However, not everyone is convinced that mobile payments will supplant all other payment instruments. Ron Delnevo, founder of Bank Machine which installed the first independent ATM in the UK, believes cash and other payment instruments do have a future. “Cash has been around for 2,500 years. Even in our fast-changing world, it is still the payment method used for 80% of all transactions around the planet,” says Delnevo.
Although mobile payments are still in its early stage of development, particularly in the UK market, the prediction by the Payments Council is warranted due to the rapid success of mobile payments worldwide. While mobile payments will grow more popular over time with consumers, only time will tell if they are successful enough to replace debit and credit cards as the preferred payment instrument of the modern consumer.
Read Tristan Hugo-Webb’s Perspective about mobile banking in the UK.