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British consumers are increasingly favouring contactless payments over using cash, despite enduring security concerns about the technology, MoneySuperMarket research shows.
The comparison website quizzed 2,005 individuals from various age ranges to find contactless was the most common payment method (39%), ahead of cash (31%). However, 55% of the respondents expressed concern over the security of tap and go technology.
Their apprehension is also highlighted by the fact 5% of respondents saw digital banks as the most secure way to manage their money, compared to 65% for branch-based banks.
The older generation of over 55s favour the use of traditional banks (72%), while the figure was 63% for 18-34 year olds.
Nationwide Payments’ research in June 2017 also found around a quarter of the UK expects to pay using hand-embedded chips in shops in the next 20 years.
Swedish rail operator SJ has already been using the technology by enabling travellers to pay using microchips instead of tickets, but almost half of MoneySuperMarket’s respondents are currently concerned over this upcoming technology.
The resistance was slightly more evident in the older age group, with 52% of over 55s against the chip, in comparison to 47% of 35-54 year olds.
There was also concern towards using facial recognition for transactions, with 44% of respondents against it. MoneySuperMarket’s money expert, Sally Francis-Miles, said she expects consumer attitudes to soften on this front as users become more accustomed to using it.
“Twenty years ago, contactless payment was unheard of, and while there was reluctance to use it when it was first introduced, it’s now used without question by millions,” she said.
“However, it’s understandable that having a chip inserted into your finger to make payments is too advanced for now, but in 20 years’ time, it could be a different story.” Francis-Miles added the convenience of new technology is changing how people spend and manage money.
“Over 12 years ago, cash made up more than half of all payments in the UK. Fast forward to now, and we’ll soon have the ability to pay for a product or services via artificial intelligence (AI) bots on Facebook Messenger, in addition to fingerprint and facial recognition,” she said.
“This emerging technology not only reduces the need for cash, but makes purchases quicker and easier. The ease could mean that we end up spending more frequently and across borders, but at the same time consciously managing money better as it’s easier to document.”
Francis-Miles said some of the new transaction methods have a way to go before reaching prominence, but in the case of fingerprints and facial recognition, “it’s only a matter of time until this becomes the norm for payments”.
Mastercard is already trialling a new method in Holland, which integrates contactless into jewellery. In January 2018, the payment firm agreed a pilot project with Dutch bank ABN Amro so 500 of its customers could approve purchases with wearable devices such as bracelets and rings.
Mastercard surveyed European countries about this trend, with 26% of the UK respondents feeling comfortable with the technology.