The Way We Pay Is Changing – Is Your Business Ready?
We are currently seeing a huge shift in the way people pay for goods and services. While we are seeing the continued growth of online payments and ecommerce, we increasingly see that customers are using contactless payments – both through contactless cards and mobile phones.
This is having a huge effect on payments as a whole, as well as on customer expectations. That’s why we think it’s important businesses have the right tools to accept modern payment methods.
In this article we’ll look at how the payments marketplace is changing and what your business can do to keep up.
The growth in contactless
Let’s start off with a snapshot of how contactless payments are growing.
When you look at statistics from the UK Cards Association you can see that in May 2015, 7% of all card purchases were made with a contactless card. Now when you look at May 2016, you can see that this has increased to 18%.
This equates to a 247% increase in the amount spent from May 2015 to May 2016, with a 209% increase in the number of purchases made using contactless cards over the same period.
“We expect this upward trend to persist with consumers continuing to migrate to contactless card payments.”
-Mark Barnett, President of MasterCard UK
TfL – contactless in action
The London transport network has embraced contactless payments. Perfectly positioned to take advantage of this technology, TfL have seen a million contactless payments in a single day.
Mobile phone payments have become an equally important factor for TfL, with 3 million journeys paid for with mobile phones in the first 6 months of Apple Pay in the UK.
While Apple Pay and mobile payment may not have had quite the seismic impact some expected, in some cases like this one the shift has been sudden and significant.
Ecommerce is mobile too
Mobile phones aren’t just part of the way we pay for purchases at point of sale – they also have a massive influence on how we make purchases online.
During the period of November 2015 to January 2016, 51% of UK online retail sales were completed on a mobile phone. This highlights the importance of not only having a functional online payment gateway, but of it also being mobile friendly!
The knock on effects
When we look at the UK Cards Associations statistics for 2016, we can see how contactless payments are starting to affect the payments landscape. While card spending was up by 9.6% compared to 2014, the average amount spent per transaction was down. This shows how we are using our cards for smaller payments, where it might have previously been more convenient to use cash.
One out of every eight card payments made in the UK is now a contactless payment, so the growing popularity of this payment method is clear to see. Its popularity is now increasing so rapidly that the total number of contactless payments made in 2015 was more than double the amount made in the previous 7 years!
What this means for your business
It sounds obvious, but getting paid is important. You want making a purchase to be as convenient as possible for your customers – after all, you want to leave them with the best possible impression of your business.
The contactless share of the payments market is growing, increasingly replacing cash as a way to pay for smaller purchases. The thing to realise is that contactless payments are here to stay – if you can’t accept them, you risk losing out on valuable business.
Get the right technology
Here at First Data we believe the right technology will give your business the edge. When it comes to accepting contactless and mobile phone payments, there are some powerful business solutions out there that can allow you to do that and so much more.
Want to equip your business with a solution that can help you get paid? Clover Station, Clover Mini and Clover Mobile have all been designed to accept all modern payment methods, including mobile phone and contactless.
You can switch to a Clover solution from your current service provider and get up to £150 cash back – find out more.