Cards have revolutionised customer convenience but do we trust them? What trade off between convenience and security?

Using cards, and in particular debit cards, which do not have the same automatic protection guarantees, brings with it a number of risks in today’s consumer world where we trade ease of payment against security.

While we are usually happy to use our debit cards for payments with those brands we trust (supermarkets and stores), many of us still prefer to use cash for smaller payments when we’re out and about. Indeed, the Payments Council say that 48% of consumer and business payment volumes are in cash compared to 24% by debit card and 6% by credit cards.

According to YouGov, 55% of people place security of payment and data at the top of their priority list while only 26% place ease of payment at the top of theirs.  In small amounts, cash is still easier to manage. Generally speaking, we no longer carry chequebooks and rely on cash (from machines) and cards. If you need more cash you just draw some out and manage your spending as you go.

We all ensure that a secure lock and VeriSign site is used for online shopping, or we should. If you lose your card or payment fails on a scamming site you can phone your bank and cancel your debit card – but for 2-3 days, without a chequebook, cash or card, what can you do for payments? Currently in the UK, while retailers are happy to accept a debit card, life without one means that you need some cash! This impacts very heavily on the younger generations who are very familiar with card systems and used to life with little or no cash.

Using a Credit Card is costly in terms of interest (payable immediately on cash withdrawals) can often carry a retailer charge for small bills and may also have a negative impact on your credit rating (which you probably don’t realise until you want a loan). To avoid using credit, you can go to a branch of your bank and, provided you know a great deal of bank and security questions off the top of your head, they’ll give you some cash.

While inconvenient and stressful, banks realise that they’re not always open and want to help. With some banks, you can get ‘emergency cash’ sent as a code to your phone and this code will provide you with some cash when you go to the bank’s cash machines – this is a really good idea but…. though not so great for a bank! People who have done this once or twice quite often try codes randomly to try to gain cash from machines during a night out – each failed attempt costs the parent bank money and could undermine the willingness of banks to continue to provide these services.

Convenience vs Security – We can devise some simple and easy ways to ensure that you have a means of payment which is acceptable to retailers or to help you get cash. 2015 is seen as the watershed year for new and cheaper payments systems and people suggest that the desire for easier of payment may overtake the security concerns of consumers. Therefore, the future solution should be the phone, the card, the bank and the retailer working together and enabled by a modern banking IT platform built for speed, accuracy and security.

We think that the use of smartphone technology should open the door to easier banking, better customer service and consumer protection. So the future for mobile banking? Keep reading this blog. Please do the survey.

Digital growth

Countless surveys have indicated that we are approaching the Rubicon in digital access including banking. For example: A Google survey on Internet usage reported that 78% of users would not leave their homes without their devices. The introduction of digital capabilities into banking started in 1997 and has been accelerating every since.

Entitled ‘It’s in Your Hands’, an EY and BBA study on banking found that:

• £6.4 billion a weekin Internet and mobile banking transactions – up from £5.8 billion last year.
• 7 million app downloads – 15,000 per day in 2014 and rising.
• 7 million log-ins a day for Internet banking.
• £6.1 million spending a week contactless cards.

What people do with their digital access varies considerably but in all reports balance checking is of prime importance.

While 70% of people in UK use the Internet at home to purchase financial products, only 20% currently use eMobile solutions – thus there is an increasing market for smartphone technologies to catch up with Internet usage.

Contactless payments are increasing but present security issues if cards are lost, read or cloned. In theory, a phone should be more secure if properly enabled and customer confidence is achieved.

There is also a significant increase of smartphone activity while shopping and there are 10m O2 Wi-Fi users of which 3m were active in retail outlets during a 30 day period in 21013 according to Telefonica.

Despite the use of eMobile technologies to check prices etc while shopping, mobile purchasing is still relatively immature and can present security concerns. The new Amazon phone includes a bar code reader to enable scanning of products in retail outlets and ordering and paying for them online through an Amazon account. While this is unlikely to please some retailers who require different margins, it is an indication of how competitive eMobile technologies will drive consumer shopping to become.

A phone can scan your shopping and create a bar code that the till can scan to complete payment just like scanning an item. There are many more possibilities available if phone security can be trusted, personal data managed and consumer demand for easier payments recognised.

78% of mobile users won’t leave home without their mobile device (according to a Google survey on internet usage). The infiltration of digital capabilities into banking has been gaining pace since it started in c.1997, but are we approaching the Rubicon?

Most people use digital access to check balances, and eMobile to check prices on the move.  Despite the growth in available technologies, mobile purchasing behaviour is still relatively immature – while 70% of people in UK use the Internet at home to purchase financial products, only 20% currently use eMobile solutions.