The Future of Payments

From trading livestock to waving a plastic card, the way we pay has changed over time – and it’s set to transform drastically in the next few years. We surveyed the nation, spoke to leading finance experts, and analysed transactional data to learn about the payment methods of yesterday, today, and tomorrow.

Get ready to travel through the world of payments and find out how we feel about the state of affairs today, and what payment methods will look like in years to come.

Explore payments or jump to:

The Future of Payments

The History of Payments

People have been paying for things ever since there were things to pay for – but the way we do it has evolved. From trading sheep to exchanging sequences of 1s and 0s, our preferred payment methods have come a long way.

Explore the history of payments to get an idea how our transactions have developed – and what they might look like in the future.

The History of Payments

Scroll to begin
1950 US Diners Club launches
1951 Franklin National Bank introduces first charge card in the UK
1963 American Express launces in the UK
1966 Barclay’s issues its first credit card
1990 Cashback is introduced
1987 Barclay’s launches the first debit card
1979 Visa introduces the first payment terminal
1967 World’s first cash machine unveiled in Enfield, Middlesex
1994 Half of UK adults have a debit card
1998 Use of debit cards surpasses cheques
1999 Half of UK adults have a credit card

ExxonMobil, a US petrol company, was the first to experiment with the contactless concept in 1997, allowing customers to wave a Speedpass card in order to pay for their petrol. The UK banks caught up quickly, with Barclaycard introducing contactless credit cards in 2007. A few years later, Transport for London got on board. In 2015, contactless travelled from our cards to our phones with the launch of Apple Pay and Android Pay.

Alongside contactless, the popularity of online shopping, and therefore online banking, began to take hold. Thompson Holidays facilitated the first electronic transaction as far back as 1981, but it wasn’t until the late 1990s that things really took off with the launch of Google Checkout and, shortly afterwards, PayPal. By 2001, more than 100 million card payments had been made online.

Fast-forward to 2009 and the development of bitcoin, the first decentralised cryptocurrency, and payment methods were launched into a whole new chapter, moving from the physical tools in our wallets to 1s and 0s on our servers.

Expert insight

"Evolution, not revolution"

"The UK market has been historically on the leading edge for early adoption of new payment technologies: for example, contactless cards for in-store payments met a strong success in the UK far before most other markets. The UK has also had a strong track record of biometrics use for both law enforcement and commercial use cases. It will likely be a leading market for the fast adoption of mobile payments using biometrics, wearables, and new peer-to-peer technologies.

"One reason for our success in adopting new payment technologies in the UK has been our step-by-step approach. For example, we introduced credit cards which initially required to be embossed and slip signed, we then moved on to a magnetic stripe on the back of the card to replace, where possible, embossing.

"The next step was to insert a first-generation payment chip into the card but signature was still required. We then introduced a PIN to replace signature, we now have contactless cards that can be just tapped for a payment to take place and in the near future we will replace the PIN with a biometric form of authentication.

"Each move is a small step down a long path of improvement but one that takes into account both sides of the payment process by ensuring each change is relatively small and easy to understand. It’s about evolution, not revolution."

Howard Berg, SVP of Banking and Payment at Gemalto

The Way We Pay Today

Whether you need to hop on the bus, buy a coffee, settle your water bill, or make a down-payment on a car, the way we pay for things today is different from the methods we used 20 years ago – after all, can you even remember the last time you sat down to write out a cheque?

We’ve pulled together data from a variety of sources to create a picture of what the payment landscape looks like today. Explore survey results and expert opinions to find out whether you fit the bill in terms of the way you handle your daily transactions, and what this means for the wider world of payments.

The Way We Pay Today

Scroll to begin

A closer look at contactless

It’s clear that we’re keen to choose contactless for certain transactions – but when are we most willing to pay this way? It seems we use contactless to pay for more things every day, but spend less money on contactless transactions overall. This makes sense, given the current UK limit for paying with contactless is £30.

Contactless vs. non-contactless

(August 2018)
Non-contactless 39%
Non-contactless 39%
Contactless 61%
Contactless 23%
Contactless 23%
Non-contactless 77%

We also have different spending habits based on whether we’re using our credit cards or our debit cards. We tend to use our debit cards for more low-value contactless transactions, whereas we’re more likely to use other methods (such as chip and PIN or online payments) to put higher-value purchases on our credit cards.

Debit cards vs. credit cards

(for the period September 2017 to August 2018)
Non-contactless transactions 40%
Non-contactless transactions 40%
Contactless transactions 60%
Contactless transactions 36%
Contactless transactions 36%
Non-contactless transactions 64%

How do businesses feel about using new payment technologies?

Has your business adopted new payment tech?

Yes - Efficient Yes - Safer Yes - Other 36% 31% 22% 21% 11% 9% Yes - For expansion No Don’t know 40% 30% 20% 10% 0%

Payment types and technologies businesses use most

Bank transfer Chip and PIN Contactless card Cryptocurrencies Apple / Android Pay None Retina scan Biometric Face recognition Wearables 39% 25% 24% 22% 22% 16% Cheque Cash Peer to peer 40% 30% 20% 10% 0% 8% 7% 7% 6% 6% 6% 4%

Have you ever been a victim of fraud/hacking on any of the following accounts?

Credit card
Debit card
Online banking
PayPal and peer-to-peer transactions

Has this made you trust this form of payment less?

Yes, definitely
Yes, somewhat
No
Expert insight

Criminals can check out

"With scammers becoming more sophisticated, new ways of paying will hopefully slow down criminal activity and give consumers more confidence about paying for things remotely or online."

Laura Rettie, personal finance expert at money.co.uk

We might be a bit sceptical about using new payment technologies, but it’s clear that contactless has won a place in our daily routines – and it was introduced to our wallets just over a decade ago. So how will we be paying in 10 years’ time? Find out, with the Future of Payments.

Payments of the Future

Treat your friends to dinner with the press of a fingerprint. Buy your next home using cryptocurrency. Just say ‘yes’ to a robot and walk away with your shopping. There are lots of things we’ll be spending our money on in the future – but how will we be paying for them?

We surveyed consumers and interviewed leading experts to find out what the future of payments could look like. Explore some of the emerging payment technologies and find out how consumers and business owners feel about the ways we’ll handle transactions in the future.

Payments of the Future

Scroll to begin

The future of paying for transport

Based on recent Transport for London data, contactless payments were set to become the most common way of paying for transport by the end of 2018, with people using contactless to make more than 872m journeys on London buses, trains, and the Tube.

According to our forecast, this set to continue to grow, with over 1.5bn journeys made using contactless by 2025.

Contactless journeys made

2018
872,899,589
2019
1,051,407,609
2020
1,193,539,899
2021
1,305,073,473
2022
1,392,595,726
2023
1,461,275,895
2024
1,515,170,367
2025
1,557,462,257

The future of cash

Way back in 2004, card payments overtook the use of cash, and our data indicates we’ve been using it less and less ever since. But most of us aren’t ready for it to disappear altogether.

Consumers vs. businesses:
How do you feel about the prospect of a cashless society?

Consumers
Businesses
Consumers
Businesses
Consumers
Businesses
Consumers
Businesses
Consumers
Businesses

Experts on cash

“Cash will be the first to go – it’s filthy, easy to lose or steal, and not convenient.”

Laura Rettie, personal finance expert at money.co.uk

“The emergence of contactless cards and now mobile payments and wearables was motivated by the goal to further simplify the user experience and to enable digital payments for small value transactions instead of cash. The future trend is going completely cashless, while preserving people’s privacy during the payment process.”

Howard Berg, SVP of Banking and Payment at Gemalto

The future of cards

According to our research, cards aren’t going anywhere fast. After conquering cash payments way back in 2004, in the short-term it’s set to continue to grow as our choice way to pay. But how much longer will we be using plastic for?

Experts on plastic

“With it being so easy to pay for things with technology like Apple Pay on your mobile phone, cards will fast be made redundant too. Shopping online these days is so easy with ways to store your card details so you don’t have to dig them out each time you want to pay for something. It’s only a matter of years before we won’t need to carry wallets.”

Laura Rettie, personal finance expert at money.co.uk

“I think plastic will drastically increase, however I still think we will heavily rely on this in developing countries as a payment method and it won’t totally disappear in the next ten years.”

Dr Abul Naser, Senior Lecturer of Accounting and Finance at London Met University

“Despite rapid and very advanced innovations on mobile, wearables or ecommerce solutions, I am convinced those innovations will be complementary and not replace Europay, MasterCard and Visa (EMV) card payments, as EMV will remain the only universal and interoperable solution to pay anywhere, anytime in the world… Card-based payments are unlikely to disappear as for many consumers they represent the most logical form of payment in certain situations.”

Howard Berg, SVP of Banking and Payment at Gemalto

The Future of Cryptocurrencies

Despite the fact bitcoin has been around since 2008, cryptocurrencies still aren’t anywhere near becoming a mainstream payment method. Only 1% of survey respondents said they use and trust them – but experts have mixed opinions about whether they’ll take off.

Plastic in numbers

£33.14 £24.91
£682,768,439 £1,180,168,408
20,603,342 47,368,300
December 2017
December 2020

Experts on plastic

“With it being so easy to pay for things with technology like Apple Pay on your mobile phone, cards will fast be made redundant too. Shopping online these days is so easy with ways to store your card details so you don’t have to dig them out each time you want to pay for something. It’s only a matter of years before we won’t need to carry wallets.”

Laura Rettie, personal finance expert at money.co.uk

“I think plastic will drastically increase, however I still think we will heavily rely on this in developing countries as a payment method and it won’t totally disappear in the next ten years.”

Dr Abul Naser, Senior Lecturer of Accounting and Finance at London Met University

“Despite rapid and very advanced innovations on mobile, wearables or ecommerce solutions, I am convinced those innovations will be complementary and not replace Europay, MasterCard and Visa (EMV) card payments, as EMV will remain the only universal and interoperable solution to pay anywhere, anytime in the world… Card-based payments are unlikely to disappear as for many consumers they represent the most logical form of payment in certain situations.”

Howard Berg, SVP of Banking and Payment at Gemalto

The future of cryptocurrencies

Despite the fact bitcoin has been around since 2008, cryptocurrencies still aren’t anywhere near becoming a mainstream payment method. Only 1% of survey respondents said they use and trust them – but experts have mixed opinions about whether they’ll take off.

Experts on crypto

“Payment solutions require trust to be built and shared between merchants, consumers, and payment services providers. Such trust is hard to establish and needs to be proven in the long run... There is data today to predict if cryptocurrencies can and will achieve the necessary level of trust in their ecosystem.”

Howard Berg, SVP of Banking and Payment at Gemalto

“Blockchain technology isn’t popular yet but it will get really popular. We had these similar thoughts with the iPhone – now look at it.”

Dr Abul Naser, Senior Lecturer of Accounting and Finance at London Met University

“Cryptocurrencies have a long way yet to become mainstream. Cryptocurrencies have a very bad reputation from the level of criminal activity they have been associated with and their purpose is widely misunderstood.

“Alternative currencies may eventually face so many government regulations before they are widely accepted that it may eventually void the very reasons cryptocurrencies were invented in the first place. I suspect we’ll see something else invented to take its place in the future – a mash-up of what we currently have and cryptocurrencies perhaps.”

Laura Rettie, personal finance expert at money.co.uk

Expert insight

Streamlining security

“The use of new technologies such as device tracking, behavioural biometrics and physical biometrics enable both the industry and the consumer to meet these requirements in a way that puts minimum burden on the consumer or any two parties in a payment transaction.”

Howard Berg, SVP of Banking and Payment at Gemalto

“[Biometric payment technology] would certainly make things very secure and convenient down the line – if a little scary to think of the awful consequences if somebody really wanted to get to your money, though.”

Laura Rettie, personal finance expert money.co.uk

Sources

Paymentsense Transactions Data: Provided by Paymentsense (2015-2018 data) Survey conducted by OnePoll on behalf of Paymentsense of 2,000 adults living across the UK between 17/10/18 and 19/10/18.

Methodology

Future payment forecasts are based on Paymentsense transaction data gathered via credit card machines and card readers (gathered between 2015 - 2018) from over 70,000 businesses in the UK. Future transport forecast is based on Transport for London data (gathered between 2014-2018). All projections are calculated based on consumer patterns, to create a predicted trajectory for growth over the next few years. All survey data is based on feedback from a survey of 2,000 adults living across the UK (gathered between 17/10/18 and 19/10/18).