New findings from Osborne Clarke reveal concerns over data privacy and security are rising, despite a reduction in the use of cash across UK.
Despite well-reported reductions in the use of cash across the country, new research from international legal practice, Osborne Clarke, today reveals that UK consumers are now more concerned than they were a year ago about incidents of fraud and security breaches should mobile payments completely replace cash in the future.
UK consumers have open been to using alternative payment methods to cash for a number of years, to the point whereby card payments replaced cash as the number one payment method in 2016. Figures from UK Finance also predict that sales made using notes and coins will fall from 40% to just 21% by 2026. Yet, new findings from Osborne Clarke reveal that rising concerns over data security and privacy could hinder the reality of a completely cashless society.
Fear of the fraudsters
Eight in 10 (81%) of UK consumers say they are worried about fraud should mobile payments completely replace cash – an eight percentage point increase on the year before. 83% were also concerned over security breaches.
Nikki Worden, Partner at Osborne Clarke, said: “For many UK consumers, the convenience of cashless payments has often outweighed the security risks. However, the large number of high-profile customer data breaches reported in the news has caused concerns to grow.
“As we head towards a cashless society, more thorough security checks have to be in place to address these fears. The implementation of strong customer authentication – as required by PSD2 – will help make it harder for fraudsters and hackers to take funds from accounts that are linked to electronic devices. But businesses also need to ensure they take the necessary steps to properly protect consumer data and demonstrate cyber resilience in order to boost levels of consumer trust.”
Too much information?
In addition to fears over fraud and security breaches, Osborne Clarke also found that over three quarters of UK consumers (79%) are also concerned about sharing too much personal data should cashless payments become the only method of payment in the future – a 22 percentage point increase on the year before.
“UK consumers are clearly becoming more aware of the amount of data they are sharing with organisations and are increasingly questioning how it will be used,” says Worden. “The impending General Data Protection Regulation will certainly better protect individuals’ personal data and increase data transparency to help curb these concerns. However, businesses also need to understand the responsibility they have in bridging the knowledge gap with consumers about how their data is used. As payments methods change, banks and retailers need to anticipate the questions worried consumers will ask and have the answers ready to hand in clear FAQs.”
About the research
YouGov conducted this Connected Consumer research on behalf of Osborne Clarke between 30th October and 15th November 2017. The sample consisted of a nationally representative sample of 2,000 adults per country the eight countries across Europe, including Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden and the UK.
The percentages reported over the concerns respondents have if mobile payments completely replaced cash in the future correspond with the percentage of respondents that responded “very or quite concerned” in the YouGov survey.
The 2016 research was conducted by Retail Week, on behalf of international legal practice Osborne Clarke. The survey consisted of 7,000 consumers from seven major European countries including the UK, Germany, France, Netherlands, Spain, Italy and Belgium.
About Osborne Clarke
Osborne Clarke is a future-focused international legal practice – across our well-connected network we have over 740 talented lawyers and more than 250 expert partners based in 25 offices around the world. Our expertise in eight core sectors is focused on helping our clients to succeed in tomorrow’s world. Through our collaborative culture and sector-led approach we have a robust understanding of the local business environment and in-depth legal expertise in each jurisdiction. We’re listeners, innovators and problem solvers, finding new ways to join the dots between our clients’ challenges today and the opportunities being created in an ever-evolving, ever-developing global society.
Our core sectors: Digital Business, Energy and Utilities, Financial Services, Life Sciences and Healthcare, Real Estate and Infrastructure, Recruitment, Retail and Consumer, and Transport and Automotive.
Osborne Clarke is the business name for an international legal practice and its associated businesses.