Shifting from cash, credit and charge cards to mobile payments could have saved retailers £463m in lower transaction costs in 2013, according to a new report published today by the Centre for Economics and Business Research (Cebr).
The study, commissioned by mobile payments firm Zapp, also found that retailers would benefit from reduced online checkout times with mobile payments. Cebr estimates that these reduced checkout times could have boosted internet retail sales by £1bn last year.
The report concluded that in-store shopping experiences could be improved if retailers are innovative and mobile payment systems are implemented in a way which reduces queue length. Survey research shows that almost three fifths of shoppers would abandon a purchase when confronted with a long queue.
The instant settlement offered by services such as mobile payment should provide some respite for the many businesses in the UK struggling with cash flow issues. The report highlighted that nearly a fifth of firms in Q1 2014 report that late payment is a greater challenge than a year ago.
Previous research by the Cebr predicted that 20 million adults will use their mobiles to pay for goods and services by the end of the decade, with the value of purchases tripling from current levels to £14.2bn in 2018. By 2020, mobile payments will represent 1.4 per cent of total consumer spending.
Peter Keenan, Chief Executive of Zapp, said, “For mobile payments to really take off in the UK, retailers have to be fully bought in and this hasn‘t always been the case until now. That‘s why the findings of this report are so significant: retailers stand to save hundreds of millions of pounds by adopting mobile payments whilst providing a better customer experience. There is a clear incentive for retailers, both to adopt mobile payments online and in-store and to actively promote them to their customers.”
Douglas McWilliams, Executive Chairman, Cebr, said, “It‘s clear that retailers stand to benefit in multiple ways from the widespread adoption by consumers of mobile payments. Cash is costly because of store count and preparation costs, and errors in transactions, whilst credit & charge cards are expensive because the transaction cost increases with the price of the purchase. There is a clear business case in terms of reduced costs and improved customer service and sales.”