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.
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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;
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By GlobalData• 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.
