’Tis the the season to be cashless
I wrote last week on how Black Friday and Cyber Monday might show a change to increased consumer spending online, rather than in-person at the store. Visa has also waded into the debate now that we have reached Christmas shopping season, proper.
The payment card issuer reported that £28bn was spent using Visa cards on the first day of the Christmas retail season, backing up the prevailing mood that cash could be on the way out. Or is it? It’s not an unexpected realisation that consumers across the United Kingdom have been keen on using non-cash payment options in recent years. As we have consistently reported on Contactless Intelligence, contactless payments have been on the rise across all of Europe, up from 36% in 2015, to 52% in 2016 so far.
However, for the average consumer, there is more a blurring of lines between in-store and online shopping, rather than a sudden change overnight. More expensive items continue to be given the 'once-over' in traditional retail locations first, before a purchase is made. That said, it is not totally uncommon for consumers to buy items, such as a new TV, online, without having seen it in person first. Most consumers have faith in online retailers, which is a positive development.
“With more than £2bn being spent on Visa cards in the UK on Black Friday, we continue to see an increase in the shift from cash to cards when people do their Christmas shopping. This is driven by British consumers’ increased familiarity with contactless cards and other new digital payment services,” said Visa UK & Ireland Managing Director Kevin Jenkins. "Consumers are now armed with a variety of new ways to pay, such as wearables and a range of digital wallet options on their mobile devices. These options provide consumers shopping in store with a number of fast, easy and secure ways to buy."
The upcoming Christmas shopping season will be quite intriguing to keep an eye on. Visa expects even more people to use contactless payment options moving forward, although it appears that mainly online shopping will be on the rise. The bigger question is whether or not we will see decent retail sale deals. The word out there is that retailers really hate these pre-season sales and this year both Black Friday and Cyber Monday offers were disappointing.
Casting a note of Christmas cheer (NOT!) was global payments company ACI Worldwide, who forecast that eCommerce retailers in Europe can expect an 11% rise in fraudulent activity during the upcoming Christmas shopping season, compared to the same period last year. The predictions are based on an analysis of hundreds of millions of transactions from European online retailers. Fraud attempt rates directed at European eCommerce retailers are expected to increase 11% by volume during this year’s Christmas shopping season – with sales to increase by nearly the same rate (12%) in 2016. The peak day for fraud attempts is likely to be Christmas Eve, with an expected near fraud rate of 2.5%.
“Our research shows that online fraud is increasing at a nearly equal rate to the general growth rate in eCommerce activity due to a continuing shift from in-store to online activity among in the UK and Europe. And because fraudulent activity is now considered to be an everyday occurrence, consumers and merchants must take every precaution as we head into peak holiday shopping season,” said Julia Roberts, Payments Risk Manager EMEA, ACI Worldwide.
“The upcoming Christmas season provides major revenue opportunities for eCommerce retailers. However, with opportunity comes risk as fraudsters consider peak trading periods as an opportunity to more easily go undetected. A well planned and thought out fraud management strategy can increase revenue by as much as 20% and we encourage retailers to make adjustments to their fraud monitoring and prevention strategy in order to provide customers with a seamless shopping experience during this busy season.”
Little bit of Christmas cheer there, then…
Steve Atkins
Contactless Intelligence
