Key driver of Alternative Payment Systems is "convenience"
A recent survey by Gocompare.com surveying British adults with bank accounts found that some 80% have used alternative payment systems within the last 12 months, systems including PayPal, Google Wallet, Apple Pay and contactless debit or credit cards. Convenience of these systems is the key usage driver, with some 50% of respondents citing this as the main reason they use them as an alternative to cash or traditional bank cards.

80% of Brits with bank accounts have used an alternative payment method in the last 12 months

Brits are switching on to new technology to manage their money and pay for goods and services according to a new research. Surveying British adults with bank accounts, Gocompare.com found that 80% have used an alternative payment method, including a contactless debit or credit card, PayPal, Google Wallet or Apple Pay in the last 12 months.

Half of those using the new payment systems do so because they find them more convenient than traditional payment methods, while 24% said they were easier to use than cash or traditional bank cards. A fifth plan to use the new payment systems more in the future.

But, worryingly, 15% of users said that they were concerned that the new digital payment systems encouraged them to spend more than they should and 7% don’t connect their spending in this way with ‘real money’.

Alternative payment systems:

The most popular alternative payment systems used in the last year were PayPal (70%), a contactless debit card (19%) and a contactless credit card (11%). A smaller number of those surveyed have used other platforms including Goggle Wallet (4%), Pingit (2%), Apple Pay (2%) and Paym (1%).

Convenience (50%) was cited as the main reason for using the new payment systems, while 30% said they like to use digital wallets such as PayPal and Google Wallet as it made online shopping easier – a fifth said they didn’t like having to input pin numbers or card details.

Over a third (36%) of those surveyed would like to see more websites offering alternative payment methods.

Only 28% of users thought that the new digital systems were more secure than traditional payment methods.

Contactless payments:

While 36% of those surveyed had received a contactless payment enabled debit or credit card from their bank, only a quarter had used the card to make a contactless purchase. The survey also revealed that:

46% were worried about fraud in connection with contactless payment systems;

30% regularly see retailers and restaurants advertising contactless payment;

24% found contactless payments and digital wallet payments scary;

A fifth expect to make a contactless payment this year;

Only a handful (3%) don’t know what contactless payment is.

The survey, commissioned by Gocompare.com, also found that 67% of people regularly manage their money online, including via their mobile phone.

Smartphones:

Smartphones are changing the way people manage and spend their money:

30% of those surveyed have checked their bank balance using their smartphone;

28% have downloaded a mobile banking app for their phone;

26% said they were scared by the idea of using their phone to pay for things

19% have made a payment through a banking app on their smartphone;

4% have made a contactless payment using their phone.

Commenting on the research findings, Matt Sanders, Gocompare.com’s money spokesperson said, “It’s clear from our research that new technology is changing the way we spend and manage our money – with many people now reaching for their phones, rather than their wallets to pay for goods and services.

“Perhaps unsurprisingly, 18 to 24 year olds**, who’ve grown up in the internet age, are particularly tuned into and less fazed by the new digital ways to spend money – finding them easier to use than cash or traditional bank cards. But, worryingly, our survey suggests some of these young adults are struggling to connect their digital spending with real money. More than double the number of people in this age group are concerned that digital payments encourage them to spend more than they should, particularly online, while 18% don’t equate the money spent as real cash.”

Matt Sanders continued, “While the new payment systems help remove some of the hassle of remembering pin numbers or re-keying in of information, they also make it quicker to spend money. But, many people lose track of their spending and lots of small payments soon add-up to a sizeable bill.”

Earlier this year Gocompare.com launched the first midata current account comparison service to help people find out which account is best for them, based on how they actually use their current account.

For more information on midata, visit gocompare.com/money/midata/