According to a study by the Centre for Economic and Business Research (CEBR), a UK-based research organisation, which was commissioned to carry out the study by m-payments firm Zapp, projects that more than 20 million Britons will be using mobile payments by the end of this decade.
CEBR revealed that, by 2020, mobile payments will represent 1.4 % of total UK consumer spending.
Fraud losses on UK plastic cards stood at GBP 388 million in 2012, with GBP 68 million of these losses from cards lost, stolen or intercepted in the post. Card ID theft also led to GBP 32 million of fraud losses.
The report also revealed that cash is the most expensive mainstream form of payment — once costs such as store count, preparation and transaction errors are factored in — at 2.8 % of cash takings. The transaction cost of debit and credit cards amounted to 1.1 % of total plastic card takings.
More than a quarter of UK consumers incurred an overdraft charge in 2012. The greater transparency offered by mobile payments, which can allow instant bank account balance checking, should leave many consumers better informed and able to avoid tipping over the edge of their authorised limits, the report argues.
Also, the adoption of mobile payments by small businesses has the potential to move the ‘cash in hand’ economy over to mobile payments, the report said. By offering instant settlement, mobile payments should provide some respite for the many businesses in the UK struggling with cash flow issues.
Finally, the report shows that 24 % of UK businesses reported late payments from customers to be a greater challenge in Q3 2013 than a year ago.
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