We now have so much choice with making payments, more than any other generation ever has.
Technology will continue to progress so this trend will only keep growing; evident by the development and trial of biometric cards, smart rings and of course the contactless limit increasing yet again later this year to £100. Whether you like to use your phone, debit card or even your smartwatch to make payments, there is a convenient payment method for everyone.
With the recent onset of the pandemic, the government has encouraged consumers and businesses to refrain from using cash, meaning that the favoured payment method that has been adopted by most is now contactless. In fact, 88% of all payments made in the UK last year were contactless.
We have seen unprecedented developments in all forms of card payments, especially when reflecting on how payments would have been viewed at certain points in the past. For example, 25 years ago if you would have told someone that certain places would be cashless or only accepting cards and not accepting physical money, they wouldn’t have believed you. This is the same if you were to go back to the 1940s and talk about card payments, they would have considered it science fiction. Another indicator showing the importance of card payments and how their popularity has grown enormously is the fact it has over-taken cash as the most widely used method of payment. This started to happen before the pandemic, however, it has accelerated at a much faster rate. Future projections are now occurring about cash payment transactions potentially dropping to only 10% of all transactions within 3 years.
The history of card payments
Below are some key dates for card payment advancements
We can see from this historic timeline that there have been enormous technological advancements across various payment methods over the decades and it’s certainly not slowing down. It started with developments centred purely around cash and then progressed to credit and debit cards. This growth has occurred in a relatively short period, especially when you consider the time that would be spent developing these behind the scenes. Chip and pin is a great example of how it can be a lengthy process to get a hugely innovative idea such as this to market – the first trials started in 1997, however, it was nine years later before chip and pin was actually introduced into the UK. COVID has meant that contactless payments have had to progress swiftly, due to necessity. Firstly, the contactless limit was increased to £45 in April 2020, this was in the pipeline for a while but due to the overwhelming adoption of this payment method and being a much safer and hygienic method of payment, it has influenced the limit to increase again to £100 this year.
So, what does the future of card payments look like? Well, nobody knows for sure. The likelihood of the impact of the COVID-19 pandemic will be sustained, contactless payments are easier for consumers and with the limit of these payments increasing, it means that more and more products can be purchased with ease. Therefore, it’s likely we will continue edging further towards a cashless society. If you are a business owner, you will need to accept these payment methods or otherwise, consumers will shop elsewhere, resulting in a loss of revenue. So, if you don’t already accept card payments, now is the time to revaluate your options. Equally, if your existing card terminal looks like a device that would comfortably give a Nokia 3310 a run for its money, then you might want to think about updating it to the latest smart terminal. Whatever your circumstances, CardPayments can help you find the perfect solution for your business