Consumers are increasingly shunning traditional methods of payments as part of a move towards embracing mobile and online payment methods.
By 2019, 19.6% of all transactions made in the UK will be made by methods such as mobile payments, vouchers, coupons and PayPal, as opposed to 9.3% of transactions made today.
This rise will be accelerated by an increase in those of us who are 'unbanked' - without any financial ties to typical banks, estimatedat being around 1.54m in the UK alone in 2009, when the last such survey was undertaken. Paypoint will introduce a PayByPhone mobile app, scheduled for release later this year.
To cope with this shifting market, retailers will need to provide a choice of payment methods to appeal to different age groups, the research found. Older people in particular have different preferences and buying habits with two-thirds of adults aged over 55 saying that they would never make a purchase using a smartphone.
"We have to react to these changes of consumer demand," Dominic Taylor, PayPoint chief executive, told CBR. "Consumers are becoming much more demanding in the way they live their lives and what they expect from service organisations. Payment methods are multiplying, giving consumers ever more choice, and businesses need to get it right".
"Consumers do not want to be defined by a payment channel," he added, "They want to have a multi-channel solution that suits them at any given point of the day."
The apparent security of a payment method was the most crucial factor for consumers in choosing how to pay for a purchase online or in-store, the research found; with 55% of those surveyed saying this was the most important factor for them.
The shift towards online retail also means that consumers are becoming less willing to wait for their purchases, the research found. For in-store purchases, the average maximum queuing/payment time that people were willing to endure was 5.7 minutes, however for online purchases, this shrunk to only 2.9 minutes.
Such delays could be causing businesses to lose out on sales estimating that such shortcomings caused customers to abandon purchases in 4% of cases for in-store retailers and in over 5% of cases when shopping online.
Implementing better payment systems could be a huge potential source of income for bricks and mortar retailers, which the report estimates could potentially gain £2.5bn. IOnline businesseslost out on approximately £390m by customers abandoning their purchases in the last 12 months.
PayPoint announced a company-wide rebrand of its business, including a relaunch of its mobile and online payments businesses as it looks to embrace the continued growth in these areas.
Going forward, the company's internet payment service provider and mobile phone payment businesses, previously known as PayPoint.net and PayByPhone, will be merged into one new entity known as PayPoint Mobile and Online.
The new business handles almost £5 billion in consumer payments annually and has 7 million customer registrations for its mobile services.
"Customers want to pay by mobile or online with a convenient, simple, seamless experience," Dan Salmons, Managing Director, PayPoint Mobile and Online, said. "As a result, many organisations are suddenly finding they need more sophisticated payment solutions that can keep up with the rapid changes in technology, consumer behaviour and regulation.
"By combining our unrivalled expertise in mobile and online payments, we can manage payments from app to bank, making it simple for organisations to resolve their payment needs," Salmons added. "Our modular platform means we can rapidly develop a wide range of solutions from home energy to urban mobility, online gaming to financial services."
The research was conducted for PayPoint by the Centre for Economics and Business Research (Cebr).