A report by Payments UK has crystallised what many of us will already know through our own spending behaviour and that is, cash is living on borrowed time and within a generation could well be the preserve of just a cautious and conservative minority of ‘flat worlders.’
Consider the facts, researched and presented by this week’s Payments UK survey.
2015 was the first year that cash was used for less than 50% of payments made by consumers, a figure which is predicted to fall to 27% of all payments by 2025. By comparison, the number of debit card payments rose by 10% in 2015, exceeding 10 billion payments for the first time, an increase which is being driven by contactless technology, particularly for low value items previously made using cash.
In less than a generation, 17.3 billion debit card payments will be made with a continually growing share courtesy of contactless. The opportunity to use contactless continues to rise. At the end of 2015, half of all cards in the UK had contactless functionality. More than three times as many contactless card payments were made in 2015 than in 2014, with 1 billion payments made, accounting for almost 9% of all consumer card payments. Contactless payments in 2015 were 3.3x the number in 2014.
The life expectancy of cash gets worse when you take into account the popularity of mobile. Payment services which use Near-Field Communication such as Apple Pay, Samsung Pay and Android Pay, will also provide new opportunities for consumers to make contactless card payments, without even needing to present a piece of plastic.
A ‘slam dunk’ of technology and opportunity fuelled by good old fashioned consumer choice is set to change UK retailingirrevocably, with the exception, that is, from that part of the retailing landscape occupied by the gaming industry.
The 2005 Act – written long before the introduction of contactless – expressly prohibits the use of debit or credit cards.
As a consequence, there’s a real danger that gaming is left at the back of the queue talking analogue when every other retailer is fluent in digital.
So, what’s the next move for gaming?
In practical terms I think the introduction of contactless to gaming would be very simple and involve a player touching their card on a pad on the front of a machine to gain £10 in credits. As I’ve just indicated, there would have to be limits on transaction values and a player should only be allowed to use a debit card. I would also like to see player prompts on screen identifying the method of payment and the amount credited in one session but other than that, in terms of social responsibility, I don’t think there needs to be anything more than what currently exists. We would need to talk with the Commission in order to agree the software systems and protocols necessary. All the trade associations must come together on this issue and present a united position to the regulator and the treasury. The Gambling Business Group and their Machines Sub Group have done a fantastic job with their TITO protocol for the UK market, and I am sure that they will be moving on contactless pay very swiftly.
As the data shows, so many people are now using cashless, either through their bank cards or using apps like Paypal or Applepay that it won’t be long before notes and coins are seen as anachronistic. When that starts to happen, land based machine play will start to be marginalised and play will transition across to mobile and on-line. This is an area where we absolutely must be on the front foot – I don’t see this as an ‘optional extra’ as some might see TITO. Without embracing contactless pay, there’s no doubt we will see the complete demise of the high street market in a few short years.