Pay-by-phone dominates Gen Z spending – Forbes Advisor UK

May 26: “Gen Z” leaves physical wallets at home to pay by phone

Mobile phone payments are on the rise, with 61% of consumers now saying they are confident of leaving their wallet at home and paying with their phone instead, according to research from card issuer Marqueta.

The survey found that Gen Z consumers – those born between 1997 and 2012 – were the most enthusiastic about mobile payments. More than three-quarters (77%) of Gen Z respondents said they could go about their day happily relying solely on mobile payment platforms, such as Apple Pay and Google Pay.

Almost 8 in 10 UK consumers (77%) said they had used some sort of mobile wallet at least once in the past 12 months.

Of these, 83% believe they can buy anything they need with a digital wallet, and 64% actually prefer to pay with their phone because it has more built-in security features such as face ID or passwords. fingerprints.

Anna Porra, Director of European Strategy at Marqeta, said: “Confidence in mobile wallets is growing and people are becoming more comfortable that their mobile phone can manage their payments and not leave blocked.

Contactless becomes the norm

Marqeta’s survey of 4,000 consumers in the UK, US and Australia also found that when consumers bring a physical wallet, the majority rely on contactless payments rather than cash. or chip and PIN.

Almost all – 96% – of UK consumers said they had made a contactless payment in the past year. Of these, 42% said they had been making contactless payments for so long that they even forgot their PIN. Among UK respondents under the age of 24, that figure rises to 54%.

Regardless of their age, the majority of UK respondents – 63% – say it is irritating to have to enter their PIN to make a payment.

The majority of consumers find cash to be just as obsolete. 63% of respondents expect cash to eventually disappear completely. Of these consumers, 59% expect the disappearance of cash to occur within the next five to ten years.

Ms Porra said: “While the pandemic has been the catalyst for the shift to contactless and mobile wallets, it’s the convenience, security and speed of these payment options that have made them stick.”

The physical bank in decline

It has been found that most consumers prefer digital banking as well as digital payments. In the UK, 46% of respondents say they can “count on their hands” the number of times they have used a physical bank in their lifetime.

Around a third (33%) went so far as to say it would have no impact on their lives if all physical bank branches in the UK closed tomorrow.

For UK respondents aged 18-24, the concept of in-person banking is even less familiar: 50% of this group said the idea of ​​going to a physical bank branch was “completely foreign” to them.

Despite their lack of enthusiasm for in-person banking, the majority of respondents said they wanted more personalization from their bank: 80% of consumers said they wanted their bank to offer them more personal rewards, while 60% would like their bank to offer them tailor-made services. budget advice.

A significant number of consumers were also interested in how cryptocurrencies could be integrated into their daily financial lives. Marquette found that 26% of UK consumers own cryptocurrency, and of those who do, 82% want to use it the same way they would with a debit card at the point of sale.


May 10: New laws to protect access to cash and help victims of scams

The Financial Services and Markets Bill announced in today’s Queen’s Speech will ensure the continued availability of cash withdrawal and deposit facilities across the UK. The stated goal is to ensure that the country’s monetary infrastructure is “sustainable in the long term.”

In the face of the large-scale closure of bank branches across the UK (see articles below), the government has acknowledged that cash remains an important method of payment “for millions of people across the UK , especially those belonging to vulnerable groups”.

Further details will be provided on the mechanisms for maintaining the treasury infrastructure when the bill is published.

The bill will also allow the payment systems regulator to compel banks to reimburse victims of Authorized Push Payments (APP) scams, which are believed to cost hundreds of millions of pounds every year. This is to ensure that victims are not paying for fraud through no fault of their own.


March 24: Lloyds follows HSBC with branch closure program

Multi-brand financial institution Lloyds Banking Group is due to close 60 branches – 24 Lloyds Bank, 19 Bank of Scotland and 17 Halifax.

He cites a reduction in branch use for the culling, saying online banking usage hit an all-time high in 2022. Rival bank HSBC gave the same reasons for its decision, announced last week , to close 69 branches later this year (see history and details below).

Lloyds says it has 18.6 million regular online banking customers and more than 15 million mobile app users, with those numbers increasing by 12% and 27% respectively over the past two years.

It says all branches slated for closure continue to have alternative access to banking and cash within a mile.

Vim Maru, Director of Lloyds Banking Group, said: “Like many other high street businesses, fewer customers are choosing to visit our branches. Our branch network is an important way for us to support our customers, but we must adapt to the significant growth in the number of customers who choose to do most of their day-to-day banking online. »

Lloyds Bank Group branch closure details


HSBC closes 69 branches

HSBC is due to close 69 of its 510 UK branches between July and October this year. The bank says less than half of its 14.75 million customers actively use its branch network, with average footfall down more than 50% since 2017.

He attributes this to the growing popularity of mobile and online banking – a trend exacerbated by restrictions associated with the coronavirus pandemic.

Jackie Uhi, head of branch network at HSBC UK, said: “The way people use their banks is changing – which the pandemic has accelerated.

“We know that the majority of our customers prefer to do a large part of their day-to-day banking online or via mobile, so we are removing locations where we have another branch nearby and there is a significant reduction in customer numbers. .using the face-to-face branch service.”

HSBC customers can carry out their day-to-day banking transactions at La Poste agencies. The bank says all branches closing this year have a post office within 1.5 miles, 97% of which are within a mile.

For customers concerned about retaining access to cash, 90% of the 69 closed branches have 10 or more free ATMs within a one-mile radius, with all closed branches having at least five.

The bank says it is working with ATM provider LINK and the Cash Action Group as part of an industry-wide effort to provide banking services in areas where branches are no longer viable.

Following the closures, HSBC UK will have a network of 441 branches in the following formats:

  • 96 full-service branches offering a full range of services, mainly based in major cities and towns where branches receive a wide range of requests.
  • 172 cash service branches supporting communities that have a greater need for access to cash, as well as over-the-counter services and the ability to deal with complex issues such as bereavement and power of attorney.
  • 173 digital service branches offering “traditional” cash and check transactions and access to other products using self-service technology.

The full list of closures is below:


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