With cash on the way out, customers are demanding more innovative methods of payment but businesses aren’t delivering

UK consumers and businesses are poles apart on the adoption of new and innovative payments technologies, according to Sage Pay’s 2015 Payments Landscape Report, published today.

More than 1 in 4 consumers say that they are more likely to shop somewhere which offers a greater range of, or more innovative, payments methods.

The report also found that almost a quarter (22%) of consumers say they are likely to adopt contactless payments within the next year, indicating that the use of innovative payments methods amongst consumers looks set to increase.

However, businesses appear to disagree with their customers, with a third of businesses polled stating that they do not believe offering a greater range would encourage customer loyalty.

Businesses also demonstrated an alarming reluctance to invest in the innovative payment types consumers are calling for, with nearly half (45%) of businesses stating payments innovation is not a priority for them in 2015.

This is all the more surprising given the research found the majority of businesses agreed that the customer is king, with 59% stating that a customer-centric attitude is very important.

The research does show that there has been a slight increase in the number of businesses which now accept contactless payments compared to last year however, with almost a third surveyed (31%) now able to facilitate contactless payments, compared to just 26% in 2014.

Those businesses will be well placed to cope with the continuing downward spiral of cash, with cashless payments set to rise to 19.9 by the end of 2015, overtaking cash payments (falling to 19 billion) for the very first time. Online payments and debit/credit cards are set to become the two most preferred forms of payment amongst consumers.

The Leicester based Magento specialist Williams Commerce are implementing a wide range of ecommerce and integrated payment solutions for their customers across a diverse range of clients across both the B2B and retail landscape. Managing Director Robert Williams comments, “Over the last 5 years we have seen a gradual but increasing take-up of the more innovative payment solutions on offer from businesses like Sage Pay.

A significant change we’ve seen is across B2B, where the business model is evolving towards offering trade buyers a more B2C experience online. This is creating increasing demands on wholesalers to offer more cutting edge ecommerce solutions to replicate the online retail shopping experience.

We’ve seen a small proportion of our large wholesaler clients who rely on a high degree of repeat sales take up Sage Pay Tokenised payment to store card details, allowing for more rapid checkout payments, payment pre-authorisation and release on shipment for larger merchants.

Wholesalers, Manufacturers and business with trade / B2B customers have historically felt that the only payment method for their customers has been on account. Increasingly they have been surprised and pleased with the uptake in customers prepared to pay with a card. Especially where credit cannot be given or if customers are over an agreed credit limit. “We couldn’t believe our ecommerce website was taking £5000 orders on credit / debit cards, we never expected it. Easy for the customers and great for improving our cashflow” commented Williams Commerce customer Ian Fisher of Bonnington Plastics Ltd.

Those businesses taking advantage of the latest in payment technology will help open the doors to incremental new business from the early adopters and help position themselves as leaders in the overall ecommerce and usability experience.”

Looking into the future, Sage Pay’s report uncovered that cash is ranked only 5th by businesses of payment types they believe will be most popular in 2020, underlining the ever-reducing importance of cash on a not-so-long journey into obscurity.

“Our research makes it clear that the UK’s consumers have taken an affinity to the convenience and speed of cashless payment types,” said Sean Wilson, Managing Director of Sage Pay UK. “There are huge opportunities for businesses nationwide to take advantage of this but few are capitalising on them.” Press Release Sage Pay Payments Landscape Report 2015

“Despite businesses agreeing that cash is dying, they aren’t reacting to the changing payments landscape quickly enough and, as a result, aren’t able to meet their customers’ demands. This report clearly shows that customers are ready and willing to be the guiding star, but only if companies are prepared – and able – to listen. Now is not the time for businesses to be treading water on payments technology – they need to invest to ensure they don’t follow outdated cash payments down the road to obscurity.”

The report also uncovered attitudes of businesses and consumers alike to a range of important trends in the payments industry, including emerging technologies and alternative payments, E-commerce, and cross-channel integration. Other key report findings include:

  • 70% of businesses polled believe that payments technology can improve the customer’s experience
  • A significant increase this year of those who believe that UK businesses are lagging behind other countries in terms of payments innovations
  • Despite the emergence of Apple Pay signalling an inflection point in the payments industry, the research shows that the majority of consumers surveyed (61%) said they would not consider using it
  • Just 5% of consumers said they would consider Apple Pay when it comes to the UK
  • Consumers expect a seamless payment experiences with £1 in every £4 spent online and 37% of online sales being made on a mobile device
  • 43% of businesses said their online and offline channels are already integrated and a fifth of those who have not integrated say they are planning to do so in the next six months

    Find out more and download the report here: http://www.paymentslandscape.com