Royal Mint claims customer will reject contactless for cash

Despite the rise in contactless and smartphone payments and the prediction of a future cashless society, the Royal Mint has said that the general public will continue to turn to cash for "confidence, convenience and security." In a survey, research consultancy Future Thinking found that 31% of shoppers do not trust contactless payment methods and never use them, rising to 43% of consumers aged over 55 versus 22% for those under 35.

31 per cent, especially the middle aged and

The Royal Mint believes hard cash will continue to be popular with consumers despite the rise in smart phone payments, pictured

Nearly a third of shoppers still do not trust contactless cards, according to a new report.

People waving their cards across payment machines has become an increasingly familiar sight on the High Street.

Just under 136 million ‘tap and pay’ purchases worth more than £1.1billion are made each month.

But despite the rising popularity of this relatively new form of payment, millions of people – particularly the middle aged and the elderly – remain wary.

Some 31 per cent of shoppers never use contactless cards because they do not trust them, according to research from consultancy firm Future Thinking.

This distrust grows more widespread the older people get, with 43 per cent of consumers aged over 55 never making contactless payments compared with just 22 per cent of under-35s.

The report – which surveyed more than 2,300 people – does not specify why so many of the people surveyed are wary of using the machines.

Introduced in 2008, there are more than 81million contactless cards in circulation and almost 320,000 terminals in shops around the country.

They look like any other debit or credit card, but contain a tiny radio receiver which – when waved close to a ticket machine or terminal at a shop checkout – can be used to make payments.

But consumer campaigners have raised fears the cards may be exposing millions of customers to the risk of fraud. According to industry figures, £2.8million was lost on contactless cards to fraudsters last year, while £7.75billion was spent on them.

Tests conducted by consumer group Which? last July found thieves armed with scanners could capture the numbers and expiry dates on the cards and use them for online purchases.

Its researchers tested ten cards – six debit and four credit – and found all of them had the security flaw.

Nevertheless, the UK Cards Association said fraud on contactless cards is extremely rare and customers are fully protected for fraudulent payments on their cards.

Noreen Kinsey, senior research director at Future Thinking, said the rise in contactless payments ‘reflects consumer desires for quicker payments and increased convenience’. But she added: ‘As with all new technologies there is still some reluctance towards this technology.’

The Royal Mint said cash remained the 'most prominent' payment method for UK customers despite the growth in digital payments and online shopping.

The Mint said the general public continues to trust cash and find it convenient despite data suggesting more people are using other payment methods.

The Co-Operative today forecast mobile payments would outstrip spending on cash and in less than a decade, accounting for 65 per cent of transactions by 2025.

A spokesman from the Royal Mint said: 'The demise of cash has been predicted for a long time but it remains the currency option the general public turns to for confidence, convenience and security.

Some 31 per cent of shoppers - particularly the middle aged and the elderly - never use contactless cards because they do not trust them

'Cash is still the most prominent payment method for UK consumers and global demand for coins is as strong as ever.'

Cheryl Marshall, retail chief information officer at The Co-operative Food, said: 'We've seen incredible growth in contactless and it is the payment medium of tomorrow, although mobiles are ringing the changes.

'The new technology is perfect for convenience stores as shoppers buy fewer items and speed is important to them.

'Cash is still king as people enjoy carrying money, however we predict that by 2025 mobile payments will overtake cards and cash.'

A survey by the supermarket of 2,000 shoppers found they still tended to use chip and pin rather than contactless for payments over £10.

Trust was the main barrier when making a more expensive purchase, and the ease of contactless 'loses its appeal as soon as the spend gets into double figures in consumers' minds', the retailer's report found.

The average contactless spending on a basket in convenience stores is £8.66 compared with £18.16 when using chip and pin, and £9.38 compared with £23.28 for fuel despite the £30 limit.

The number of contactless payments has soared as more people receive bank cards containing the technology.

The launch of mobile payments - where people can pay using a smart phone with technology built in - has led a further surge

Contactless payments are now used in almost 11million transactions a month.