Consumers in the UK are ready for change in the retail payments space and in many respects have remarkable insight into the potential convenience new technologies can deliver, reveals a study undertaken by the Royal Bank of Scotland’s payments processing division RBS WorldPay.
The research into consumers’ thoughts on payments in the retail sector found that the majority – seven out of 10 – want faster, less hassle and more secure payment solutions.
In particular, 67 percent of consumers wished that independent retail outlets offered more card solutions and nearly half of consumers admitted that they would rather pay for all transactions by card and not bother with cash at all.
Overall, RBS WorldPay concluded that the overriding factor driving consumers’ payments expectations is time-pressure in a fast-moving society. This conclusion is supported by a number of key survey findings in the consumer survey:
• Four in 10 (42 percent) said their lives would be much easier if they could pay for everything with cards rather than cash;
• Five in 10 (49 percent) said they expect the UK to become a near cashless society by 2030 and 39 percent expect to only use one piece of technology for all payment transactions;
• Almost a third (29 percent) expect to soon pay for goods and services with automated face recognition;
• More than a third (35 percent) expect to soon pay for goods and services with iris recognition; and
• A quarter (24 percent) believe that one day microdots will be inserted into people’s hands to enable them to pay.
However, despite consumers’ farsightedness and a desire for change many retailers are resisting the consumer preferences and technology available.
Retailers, noted RBS WorldPay, are often more comfortable sticking to antiquated payment methods with, for example, 54 percent telling researchers that their customers still regularly pay for goods by cheque.
Stuck in a payments rut
This prompted RMS WorldPay to pose the question: “Is the retail sector stuck in a payments rut?” For many retailers this is seemingly so.
Significantly, when questioned by RBS WorldPay one in five professionals in the retail industry conceded that they do not undertake any research to find the right payment system for their business while half do not think there is anything they could do to improve the payment technology they offer consumers.
This seeming apathy is despite the proven benefits of improvements to payment systems.
According to RBS WorldPay’s research 52 percent of retailers surveyed revealed that upgrading their card payment solutions has had a positive impact on their business.
Indeed making improvements to payment systems increases profits by an average 18 percent while one in four retailers’ claim profitability has increased between 25 percent and 50 percent. Some retailers claimed even greater profit growth due to improvements to payment systems.
Among improvements that retailers need to pay particular attention to is contactless payments.
Indicatively, in its survey of consumers RBS WorldPay found that 59 percent are too embarrassed to pay for small items with cards while a quarter said that paying by card in places like bars and restaurants takes too long.
However, while RBS WorldPay found that 52 percent of retailers agree and believe there will be a cashless society this doesn’t play out when it comes to business decisions with seven in 10 retailers admitting that they will not be in a position to accept contactless cards within the next five years.
In addition only 8 percent of general retailers currently have the technology to accept contactless card payments, despite 63 percent thinking that within 10 years’ time most people will buy most small value products with the wave of a card or handheld device.
However, progress is being made as reflected in the decision by health and beauty retailer Boots to become the first major UK high street retailer to begin implementing an integrated solution within its stores to enable contactless transactions.
RBS WorldPay as the acquirer will work with Boots’ technology partners with the initial deployment of MasterCard PayPass technology in 15 stores in London and six in Liverpool. This phase of the project is due to for completion in the second half of 2009.