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20m shoppers to pay via mobile devices by 2020 – study

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12th Nov 2013
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Mobile payments are set to skyrocket with new figures predicting that 20m shoppers will use their mobile to pay for goods and services by the end of the decade.

According to a new report from the Centre for Economic and Business Research (Cebr), commissioned by Zapp, the value of mobile payments will triple from current figures to reach £14.2bn in 2018 – with the figure rising to £18.1bn when all mobile transactions, such as bank to bank transfers, are included.

Cebr has forecast that mobile paymets will represent 1.4% of total consumer spending by 2020, and outlined four key areas where this will benefit consumers, businesses and the Exchequer:

Reducing fraud: Secure mobile (and other) payment systems requiring PIN identification will help reduce the amount lost each year due to fraud – with losses on plastic cards valued at £388m last year – and contribute to the declining use of cash.

Lower transaction costs: With cash the most expensive form of payment and the transaction cost of debit and credit cards amounting to 1.1% of total plastic card takings, mobile payments have the potential to significantly lower transaction costs as more consumers use their device to pay, said the report.

Putting consumers in control: Mobile payment service, which can allow instant bank account balance checking, should help consumers avoid overdraft fees. Additionally, the uptake of mobile payment is likely to reduce the ‘cash in hand’ economy and reduce the ‘tax gap’, said the Cebr.

Reducing cashflow issues: By offering instant settlement, mobile payments are expected to provide some respite for the many businesses in the UK struggling with cashflow issues

Douglas McWilliams, executive chairman of Cebr, said:, “It's clear that the UK economy stands to benefit in multiple ways from the widespread adoption by consumers of mobile payments. But for the full potential to be unlocked, consumers need to be reassured that mobile payments are hassle-free, safe, secure and widely accepted. That will require strong cooperation across the financial services, retail and payment industries.”

Peter Keenan, chief executive of Zapp, added: “The report’s findings are fascinating as they’re the first to take a holistic view of the economic impact of mobile payments. It is easy to become fixated simply on the monetary value of payments that will be made over mobiles – this report shows there are much wider benefits to consumers, businesses, and the Exchequer.”

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