Almost four in ten people believe they won’t need cash in the near future as they increasingly turn to cards, contactless payments and other new technologies, according to a latest research from Lloyds Bank on the future of payments.
The report says that 43% believe that contactless payments are the future, whilst nearly 25% think that in five years’ time they will no longer need cash to pay for goods or services.
Recent data from the UK Cards Association shows shoppers used credit and debit cards for 1.1 billion transactions in May, an increase of 10% in a year, as the rise of contactless payments increasingly replaced the use of cash in low value transactions.
However, majority of people surveyed think that they will still be using credit and debit cards (63%) as well as cash (52%) as day-to-day methods of payments by 2025. This is followed closely by contactless payments with nearly half (48%) expecting to use it on a daily basis in the next decade.
In addition, nearly 27% people opined that they will make payments using wearable tech such as watches or wrist bands in 10 years time, 22% said they will be regularly using their fingerprint, and 7% think they will make payments using a microchip embedded in their body by 2025.
Nearly 9% of those aged over 45 said they will still be paying by cheque in 2025 versus just 4% of 18 to 44 year olds.
Commenting on the survey finding, Lloyds Bank head of personal current accounts Claire Garrod said: "Whether it is contactless, wearable tech, or fingerprint ID, people are increasingly expecting to use new technologies to make payments rather than rely on cash. The benefits of these new developments are gradually being understood and embraced by banks and their customers, to make payments more convenient without compromising security."
Following the launch of Apple Pay this year, nearly 34% of the respondents said they expect to be using a mobile device as a day-to-day method of payment in the next five years.
However there is still some way to go to persuade many people about the benefits of mobile payments, with almost half (47%) saying don’t feel that mobile will ever be a main method of paying for goods and services.
When asked about why they don’t currently use mobile to make payments, two in five (44%) said they do not think it is secure or safe. 18% don’t have the right phone, 17% don’t know anything about mobile payments, with 16% also saying they don’t know how to use the technology, showing a gap in knowledge on how to use the technology and its benefits that will need to be addressed before some can start to embrace it.
Regarding usage of cash, 25% of the respondents said they think that in five years’ time they will no longer need cash to pay for goods or services. This figure rises to 39% of people in ten years time, and 48% of people in 20 years time.
However, 50% of those aged between 55 and 75 are likely to think that they will always need to have cash compared to 40% of those aged between 18 and 54, the report says.
The consumer survey also found that women (46%) are significantly more likely to think they will always need to have cash in the future compared to 40% of men.