News & Views - Savantor

APACS Myth Busters

Monday, 07 January 2008

2008 seems likely to be the year of the pilot with contactless, multi app and NFC to the fore but as an industry it is important to look beyond this to avoid afflicting these initiatives with false expectations.  The contactless card launch in the UK was surrounded by lots of hype about the death of cash but clearly this will not be the year when cash or for that matter cheques die.  In support of this  APACS have just published ‘The Payments Myths’ booklet which includes the following:

Myth: People only use cash for small value items.
Fact: Although 82% of cash payments are for purchases of under £10 in value, cash is also regularly used for high value payments.  Of all payments over £50, we are more likely to use cash than credit cards.  700 million of these types of payments are made per year in cash compared with 400 million on credit cards.

Myth: No one uses cheques anymore
Fact: There is almost the same number of payments made by cheques as by credit card.  Although many retailers are now refusing to take cheques they remain the preferred method for credit card bill payment and remain popular for person-to person payments.

Myth: No one is paid their wages by cash anymore
Fact: Nearly 2 million UK workers are still paid in cash on a weekly basis.  APACS figures for 2006 show that 7% of the working population were paid in cash.

Multi application cards were much talked about last year but little real activity has been seen so far in the UK so saw the ABI Research "Mobile and Contactless Payments" survey, carried out at the end of 2007, which revealed that initially at least, consumers prefer a single account that is easy to manage rather than multiple applications.

Although positive growth in contactless card rollouts took place during the last half of 2007, the uptake of NFC capabilities in mobile handsets continued to be held up by difficulties in bringing the technology to the consumer market. Accordingly, NFC handsets did not ship in any volume toward the end of 2007 and the market is predicted to remain limited for the first half of 2008. 

So at the beginning of the year perhaps we should readjust our sights to more realistic claims for new technology and not write off the old technologies too soon.

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