3. CASHLESS SOCIETY
CONTACTLESS ROLL-OUT GATHERING PACE
Now Coming very soon…
200,000
Contactless terminals now
in operation in the UK
Source: British Retail Consortium
4. CASHLESS SOCIETY
CASH REMAINS KING – BY NUMBER OF TRANSACTIONS
Volume
Average
value
Cash Debit Credit
£9.78 £29.53
54% (58%)
30% (29%)
£36.40
11% (11%)
NB 2011
figures in
brackets)
Source: British Retail Consortium
5. CASHLESS SOCIETY
INTRODUCING THE GROUPS
CASHLESS CONVERTS
Highest propensity to use
means of payment other than
cash
CASHLESS CAUTIOUS
Medium propensity to use
means of payment other than
cash
CASHLESS CONCERNED
Lowest propensity to use
means of payment other than
cash
Open to cashless
payments but
prefer cash
Cashless
Concerned
Unlikely to use
non-cash means
of payment
Embrace a cash-
free existence
6. CASHLESS SOCIETY
INTRODUCING THE GROUPS
CASHLESS CONVERTS
Highest propensity to use means
of payment other than cash
CASHLESS CAUTIOUS
Medium propensity to use means
of payment other than cash
CASHLESS CONCERNED
Lowest propensity to use means
of payment other than cash
I like to pay cash for everything
I buy [14]
With a credit card I can buy the
sort of things I couldn't
normally afford [159]
Shopping online makes my life
easier [183]
I like to pay cash for everything
I buy [171]
Shopping online makes my life
easier [35]
With a credit card I can buy the
sort of things I couldn't
normally afford [64]
AGREE DISAGREE
I like to pay cash for everything
I buy [81]
With a credit card I can buy the
sort of things I couldn't
normally afford [107]
Shopping online makes my life
easier [116]
NEUTRAL
Donate to charity by
cash/cheque [92]
Donate to charity by
cash/cheque [130]
Donate to charity by
cash/cheque [87]
Used contactless bank/credit
card payment: Yes [211]
Used contactless bank/credit
card payment: Yes [64]
Used contactless bank/credit
card payment: Yes [98]
7. CASHLESS SOCIETY
DISTRIBUTION OF GROUPS
Groups
2013
Overall
numbers
Cashless Converts 4m
Cashless Cautious 28m
Cashless Concerned 18m
0
10
20
30
40
50
60
Cashless Converts Cashless Cautious Cashless Concerned
2011
2012
2013
Base: All adults 18+ Source: GB TGI 2013 Q1
Modest growth in “Converts”, with more substantial growth in
the “Cautious” segment
9. High Indexing
Purchasing Factors Banks
(By Index)
CASHLESS CONVERTS
PROFILE
31%
(60)
69%
(141)
Gender Split
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
18-24 25-34 35-44 45-54 55-64 65+
Age Split
57% are
working full time
(151)
Social DNA Map*
Base: All adults 18+ Source: GB TGI 2013 Q1
HPT
Total
pop
High Global Capital
Low Global Capital
CulturalDominating
EconomicDominating
* See Social DNA Map Explanation in Appendix
Factor
Vert
.%
Index
Interest Rates 24% 117
Introductory offers 6% 144
Telephone/Internet
Banking Facilities
20% 160
13
28
71
57
80
161
111
168
204
10. CASHLESS CONVERTS
TOP FINANCIAL ATTITUDES
Source: GB TGI 2013 Q1Base: All adults 18+
HIGH
AFFINITY
LOW
AFFINITY
Factor % Agree
Propensity
vs. Average
I don't like the idea of being in debt 86% 102
I am more aware of personal finance than I used to
be
72% 112
Financial security after retirement is your own
responsibility
70% 122
I only take out credit/loans when absolutely
necessary
66% 132
I look for profitable ways to invest my money 52% 159
The economic outlook heavily affects my
purchasing behaviour
45% 121
I would consider leaving a gift to charity in my will 42% 154
Hosting the Olympics is a good use of taxpayers'
money
38% 148
I'm interested in financial services advertising 24% 219
With a credit card I can buy the sort of things I
couldn't normally afford
22% 159
11. CASHLESS CONVERTS
TOP 10 ATTITUDES
Source: GB TGI 2013 Q1Base: All adults 18+
HIGH
AFFINITY
LOW
AFFINITY
Factor % Agree
Propensity
vs. Average
When I need information the first place I look is the
internet
90% 148
I like the idea of travelling abroad 89% 134
I often refer to the Internet before making a
purchase
85% 177
I enjoy owning good quality things 84% 139
I have a practical outlook on life 82% 121
In this day and age it is important to juggle various
tasks at the same time
81% 128
I check a number of sources before making a
significant purchase
80% 148
I enjoy eating foreign food 79% 137
Getting text messages from commercial
organisations is intrusive
78% 122
I try to keep up with developments in technology 77% 208
14. High Indexing
Purchasing Factors Banks
(By Index)
CASHLESS CONCERNED
PROFILE
57%
(111)
43%
(89)
Gender Split
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
18-24 25-34 35-44 45-54 55-64 65+
Age Split
23% are
working full time
(60)
Social DNA Map*
Base: All adults 18+ Source: GB TGI 2013 Q1
HPT
Total
pop
High Global Capital
Low Global Capital
CulturalDominating
EconomicDominating
* See Social DNA Map Explanation in Appendix
Factor
Vert
.%
Index
Counter Staff/Personal
Service
21% 138
Locality 25% 135
Interest rates 20% 95
166
149
118
110
108
63
74
66
50
15. CASHLESS CONCERNED
TOP FINANCIAL ATTITUDES
Source: GB TGI 2013 Q1Base: All adults 18+
HIGH
AFFINITY
LOW
AFFINITY
Factor % Agree
Propensity
vs. Average
I don't like the idea of being in debt 88% 104
I like to pay cash for everything I buy 78% 171
I spend money more carefully than I used to 74% 103
If there's something I want I save up for it 73% 108
I am more aware of personal finance than I used to
be
64% 99
I am very good at managing money 59% 110
Financial security after retirement is your own
responsibility
58% 101
It is important to be well insured for everything 53% 103
I only take out credit/loans when absolutely
necessary
40% 81
I trust banks/building societies to look after my
money
39% 107
16. CASHLESS CONCERNED
TOP 10 ATTITUDES
Source: GB TGI 2013 Q1Base: All adults 18+
HIGH
AFFINITY
LOW
AFFINITY
Factor % Agree
Propensity
vs. Average
If I am going to be able to use a new technology
product, somebody has to show me how to use it
56% 154
I buy clothes for comfort, not for style 54% 121
I prefer to watch television programmes at the time
they are broadcast, rather than record them
48% 128
I read a newspaper most days 46% 125
I would not change the newspaper I read 42% 125
I don't normally eat between meals 38% 121
Computers confuse me, I'll never get used to them 36% 201
I prefer local radio because it covers local news 36% 122
I like to take holidays in my own country rather than
abroad
33% 129
The effects of climate change are too far in the
future to really worry me
30% 129
19. CASHLESS CAUTIOUS
THE LARGEST GROUP IS INDICATIVE OF CURRENT ATTITUDE
0
10
20
30
40
50
60
Cashless Converts Cashless Cautious Cashless Concerned
2011
2012
2013
Base: All adults 18+ Source: GB TGI 2013 Q1
The apathy towards contactless by a large (and growing) group is indicative of
current consumer opinion. The benefits of using contactless technology is
simply not apparent
20. High Indexing
Purchasing Factors Banks
(By Index)
CASHLESS CAUTIOUS
PROFILE
52%
(102)
48%
(98)
Gender Split
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
18-24 25-34 35-44 45-54 55-64 65+
Age Split
41% are
working full time
(110)
Social DNA Map*
Base: All adults 18+ Source: GB TGI 2013 Q1
HPT
Total
pop
High Global Capital
Low Global Capital
CulturalDominating
EconomicDominating
* See Social DNA Map Explanation in Appendix
Factor
Vert
.%
Index
Telephone/Internet
Banking Facilities
14% 112
Range of services 8% 108
Introductory offers 4% 108
84
89
97
103
100
107
111
104
106
21. CASHLESS CAUTIOUS
PROFILE
Source: GB TGI 2013 Q1
You have to be careful about the
quality of things you buy on the
internet
103 (71%)
With a credit card I can buy
the sorts of things I couldn’t
normally afford
107 (15%)
Shopping online makes my
life easier
116 (74%)
10% (103)
fall into the Shopper Archetype
Quality Crusaders
HIGH INDEXING EATERIES
111 (5%)
115 (16%)
HIGH INDEXING SUPERMARKETS
107 (5%)
105 (25%)
Base: All adults 18+
23. WHAT NEXT?
HOW TO MOVE THE CASHLESS
CAUTIOUS TO BEING CASHLESS
CONVERTS
24. BREAKING DOWN THE CONTACTLESS BARRIER
CONCERNS WITH CONTACTLESS
LACK OF
OPPORTUNITY?
SECURITY?
LACK OF
CONTROL?
£20.01
25. BREAKING DOWN THE CONTACTLESS BARRIER
OYSTER – THE CONTACTLESS SUCCESS STORY
VALUE
SPEED
26. BREAKING DOWN THE CONTACTLESS BARRIER
HOW DOES CONTACTLESS FARE IN THE OYSTER TEST?
PRICE FOR LUNCH
USING CASH
PRICE FOR LUNCH
USING
CONTACTLESS
CARD
£4.20
£4.20
XVALUE
27. BREAKING DOWN THE CONTACTLESS BARRIER
HOW DOES CONTACTLESS FARE IN THE OYSTER TEST
XSPEED
28. BREAKING DOWN THE CONTACTLESS BARRIER
HOW DOES CONTACTLESS FARE IN THE OYSTER TEST
In reality…
29. CASHLESS SOCIETY FUTURE
ADDRESSING INERTIA THE KEY TO SUCCESS
Change in consumer attitude
will be driven by making
non-cash methods more
attractive as a proposition for
money transfers
28 million
Cashless Cautious that
need a reason to adopt
contactless technology
when making payments
Small wins would
address issues of
security and lack of
control, while big wins
would come from making
real benefits by way of
value and speed
It is well recognised that the idea of a Cashless society is something that won’t happen overnight. Big changes such as the introduction of plastic cards has pushed forward the idea of a cashless society and this has been followed up by the use of contactless technology in cards to use for the cheaper/faster transaction requirements (traditionally the playground of cash).
And contactless terminals are now more prevalent than ever with major retail brands adopting this technology. On top of this, supermarket brands are now gradually rolling out the technology in their stores and this is likely to push take up further.
Despite the availability of contactless terminals and the wide use of chip and pin devices, cash remains the most common method for money transactions in Britain with 54% of all transaction being done using cash. However, this figure is down 4 percentage points since 2011, so the movement is clearly there. Average values are low with cash transactions too, so when looking at this picture from a value perspective and not a volume perspective would tell a different story.
So here is our segmentation, we have three groups of consumers. We have based this segmentation on a number of usage and attitudinal questions to group respondents into three categories… the Cashless Converts, who embrace a cash free existence… the Cashless Cautious, who are open to cashless payment methods but prefer cash… and the Cashless Concerned, who are unlikely to use non-cash means of payment.
And here are some of the key usage and attitudinal questions that we have used to determine the groups. The Cashless Converts very likely to tell us that they have used contactless technology to pay for goods, and that they like shopping online. They also massively under-index on using cash to pay for goods. By contrast, the Cashless Concerned, over-index in using Cash to pay for everything and under-index in shopping online and in using contactless and in using Credit Cards to pay for goods and services they usually can’t afford.
Because TGI is continuous research we are also able to assess movement of consumers between the groups over time, and we’ve seen a reduced number of “Cashless Concerned”. However, the movement away from that group has mostly gone into the “Cashless Cautious”, with only a modest amount of growth amongst “Cashless Converts” – we’ll explore this further later in the presentation.
The first thing to notice is that this is a predominantly male group, with 69% being men. It is also a young group, with 60% being aged under 45 compared with the market average of 45%. At Kantar Media we also run something called the Why Code – and part of this allows us to look at the socio-economic background of our respondents, not simply their social class but their Social DNA. The “Cashless Converts” over index in being wealthy individuals with both culture and economic considerations influencing decisions. Younger Financial Services brands such as NatWest and HSBC over index amongst this group as well.
TGI also has a vast wealth of attitudinal statements that we use to profile our respondents. Cashless converts like to be in control of their money, they don’t like the idea of debt, and they are financially savvy. Many do use Credit Cards, but few are paying interest on their card suggesting that they pay off their balance in full each month or are on an introductory rate deal. One statement that really stands out is that they are “interested in financial services advertising” – so I would imagine they will have seen the Barclaycard Waterslide and Rollercoaster marketing campaigns.
Outside of the financial services attitudinal questions, we have a wealth of other attitude statements, and the Cashless Converts over-index most in “use of technology” and in using the Internet to research and purchase goods and products.
Finally, from a brand perspective, the “Cashless Converts” are heavy users of brands such as Waitrose, Marks & Spencer and also “convenience” brands such as KitKat and Evian, Kettle Chips and Tesco Metro.
As you would expect, the other end of the scale, the “Cashless Concerned” are entirely different. They are older, they are less affluent, they are more likely to be female and their choice of financial services provider is dictated by brand loyalty and a personal service in branch.
In terms of financial services attitude statements, this group like to use cash to pay for items and are loathsome to take out any credit products.
More broadly, they are not the most computer literate and are reluctant to make changes to their current buying habits, such as the newspaper they read and the holidays they take.
Snack brands are heavily used by this group who see convenience as a big part of every day existence. Less health conscious, chocolate and biscuits come through very strongly.
Finally, the “Cashless Cautious”, the largest group with over half of all respondents falling into this category. The apathy displayed by this group towards non-cash payment solutions is indicative of the wider consumer opinion on initiatives such as contactless technology. Consumers don’t see any tangible benefit of not using cash and are therefore apathetic towards the debate. More worryingly, this trend continues to grow, with only a small proportion of the population being real advocates of a cashless society.
Cashless Cautious are a fairly flat group when it comes to their indices. This is because they make up the majority - 56% - of the population.
From a shopping perspective however, they are comfortable with shopping online, but this is a diverse group in terms of the brands they use and the attitudes to buying that they have.
Tesco, obviously one of the largest retailers in the country could have a big role to play in the adoption of contactless payments. As they introduce contactless terminals in their stores this could drive usage amongst the “Cashless Cautious” and convert them to non-cash payment methods.
Other than relying on a Tesco revolution, what else can be done to convert consumers to non-cash payments?
Lack of opportunity? Seen the number of brands that now have contactless terminals (and it’s growing).Security? But the maximum payment transaction is only £20.. And while overall trust in Financial services providers is low.., for money transactions, the banks fair very well compared to brands from other industries.Lack of control? Again the £20 limit should ease fears of free spending.So I don’t think these are the biggest barriers to success.
So in reality, while the marketing suggests that contactless makes payment significantly easier, in truth…
