The mobile payment and cashless revolution is no longer a vision for the future: it’s here and it’s now, writes Dr Neil Garner
With trend-setting countries Sweden and China racing for the cashless crown – as indicated in the recent Access to Cash report – we’re but a stone’s throw from reaching this meaningful milestone ourselves in the UK. In 2018, the number of cashless payments surged by 31% (reaching £7.4bn) and the use of cash declined dramatically.
Technological changes driving a cashless society
Arguably, it all began with MasterCard, Visa and other original payment banks – they birthed Fintech and were once the biggest innovation of the financial industry, adopted because of convenience and security.
The evolution from signature cards to chip & pin, contactless cards, and finally mobile payments was inevitable and rapidly reshaped the global commerce landscape.
E-Commerce has the masses comfortable paying online with their cards or using PayPal, and the likes of Amazon have instilled immeasurable trust in these processes, also.
Convenience has always been behind the wheel, driving these changes, and with the effortless approach of tap-to-pay technologies or Amazon’s one-click purchasing, it’s no stretch to see why we’re abandoning cash.
Banking body, UK Finance, reports that today, 1 in 10 adults in the UK have gone completely cashless, using contactless and mobile payment technology instead due to its speed, security and convenience.
While this rapid move to abandon cash brings with it a host of benefits for UK consumers – alleviating challenges around efficiency and security – the impact is far more painful for charities, who receive a fraction of their funds from in-the-moment cash donations through charity tins.
In fact, Barclaycard research demonstrated that charities in the UK could be missing out on over £80m in donations each year by relying solely on cash-only donations.
While traditional cash-based collection methods are losing their potency, advancements in payment and digital technologies are changing consumer behaviour, and opening up new opportunities for charities to re-assess and consider how they can harness these new technologies to engage their supporters.
The importance of charities re-thinking their supporter engagement
There’s little doubt that those charities which hesitate or shy away from tech-powered solutions to solve their problems will be left far in the rear-view mirror of progression. But, as with any new development, there is an adoption curve to consider before implementation and roll-out can happen.
The majority of millennials have an innate connection with their mobile phones, using them for social media, mobile banking, retail and travel experiences, and contactless payments without a second thought. Their voracious appetite for content – in an always-on world – means their devices are never far from hand, and with the advent of payment processes like Apple Pay, use has only intensified.
There are, however, still some groups – albeit ever decreasing in size – at the other end of the spectrum who are relatively new to smart devices and have less confidence in the technology, how it works, and what the risks are.
And so the key to charities succeeding in this ever-more-cashless climate lies in offering options which can be accessed comfortably by all demographics, until tech-based engagement becomes second nature to everyone – this means raising your online game, and retaining your offline one at the same time.
The good news is that a large majority of charities have already invested in online efforts, and there are some outstanding players who are spearheading social media campaigns that are genuinely making a difference.
But upping its online game doesn’t solve the conundrum for charities, because the main activities that drive fund-raising are physical events. And in a world where most people no longer carry cash, that’s a big problem. From street chuggers to social campaigns, and from community halls to gala events, charities must be mindful of adopting solutions that ensure they get the most out of their fundraising, wherever they are. Enter, the contactless and mobile payment technology-powered solutions.
Having a cost-effective, frictionless solution that takes quick, secure payments and captures data on-the-go is the best marketing tool charities could invest in.
Payment technologies: the lifeline for charities?
With over 50% of UK transactions taking place with contactless tech, it’s certainly a route to consider. However, the hardware to accept contactless card payments is expensive and poses numerous challenges for charities, especially when only used intermittently.
These card terminals can be incredibly impractical when donating on-the-go and at events, too. Thankfully, mobile contactless payments (Apple Pay and Google Pay) offer an optimal alternative.
Using QR codes or NFC is a practical, proven and progressive way to enhance existing or new fundraising material such as tins, buckets or posters. With a cheerfully cheap initial outlay, these materials can be transformed into digital donation points able to accept donations with a simple tap or scan from a donor’s smartphone.
They can even collect Gift Aid, provide consumer data collection opportunities, and reliable tracking of funds raised – a huge boon to 2019’s MacMillan Coffee Morning!
What challenges could charities face?
The main challenge for charities is handling standard consumer adoption curves.
You need to create services which consumers feel comfortable with; options which meet physical and digital demands, friendly for your entire demographic.
Though not brand new, there remains a lacking awareness of NFC or this ability of smartphones. Android users have had it forever, while Apple has only pushed this functionality to their latest models (iPhone XS/XR and newer).
This makes concise instructions and CTAs a necessity for charity staff as well as consumers… until that adoption percentage tips and only extreme technophobes remain unaware of this tech.
NFC is well positioned to become the new rising star of Fintech. When combined with traditional means of donating with cash, charities can cling to the financial evolution of these exciting times without fear of losing out or fading from memory.
Dr. Neil Garner is the founder and CEO of Thyngs