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Mobile payments will overtake cards and cash by 2025, says UK retailer

PREDICTION: UK retailer The Co-Op foresees a sharp rise in in-store mobile payments

UK retailer The Co-Op has predicted that 65% of all transactions at its supermarkets and convenience stores will be made using mobile phones by 2025. The forecast follows research released by the company which shows that contactless use at its stores has trebled in a year and that almost 11m contactless transactions now take place at its 2,800 locations every month.

The research, based on the shopping behaviour of 2,000 consumers and carried out by The Co-Op’s food payments and group insight departments, reveals that the average basket spend for contactless is £8.66 and the average spend by customers buying fuel using contactless is £9.38.

“We’ve seen incredible growth in contactless and it is the payment medium of tomorrow.”

“Despite the spending limit being raised to £30 on contactless payments, shoppers still opt to use the Chip & PIN service rather than tapping the contactless pad for transactions over £10,” the retailer says. “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.”

“We’ve seen incredible growth in contactless and it is the payment medium of tomorrow, although mobiles are ringing the changes,” says Cheryl Marshall, retail chief information officer at The Co-op Food. “The new technology is perfect for convenience stores as shoppers buy fewer items and speed is important to them.”

The findings, however, also show that almost two thirds (65%) of all payments at Co-Op stores are still being made with cash.

“Cash is still king as people enjoy carrying money,” adds Marshall. “However, we predict that by 2025, mobile payments will overtake cards and cash.”

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