A new study published today by global information services company Experian has found that a third of the UK population believes that smartphones will take over from credit and debit card payments as the preferred method of payment by 2020.
The Banking Moving Forward study, which looked into how the UK public views the financial landscape, found that while cash and card payments still dominate, people think that alternative methods of payment such as smartphones will become more widely used over the next five years.
Nearly seven out of ten respondents said they expect cash to decrease in popularity, while two in five think there will be a decline in the use of credit and debit cards.
However, one big barrier does stand in the way of widespread adoption of smartphone payments: security. Almost half of people surveyed fear their identity may be stolen online, while 60% of smartphone users said they had no malware protection on their devices, leaving them vulnerable to hacking by cyber fraudsters.
In response to this, secure online payment platforms may fare better, with four in five saying that they think services like PayPal, which let people shop using their debit card, credit card or bank account without sharing their financial details, will become more popular.
Biometrics, such as retina or fingerprint scans, could also become commonplace. In fact, nearly half said that they would be prepared to make payments via biometric scanning, and a fifth would consider paying for goods and services using voice authentication.
“People will certainly be faced with more choice in years to come with the payment methods and providers they choose,” said Derek Garriock, head of business solutions at Experian UK and Ireland.
“Their decision will ultimately be based on the ability to pay for something, securely, anywhere and at any time at their own ease and convenience.
“Security is a key concern for many individuals, who may be willing to adopt new ways of paying but have not yet done so, even amongst the younger generation. This is understandable considering that one in six adults has fallen victim to a cyber-attack via their mobile device.”
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