Included in this issue: Cash still king but crown is slipping as consumers turn to contactless; Beijing transit opens smartphone payments to all except Apple; RailsBank raises $1.2 million in funding. Read more... 

UK

Cash still king but crown is slipping as consumers turn to contactless

The number of cash payments decreased by 11% between 2015 and 2016, but it still remains the most frequently used payment method in the UK, according to new data published by UK Finance. Consumers and businesses made 15.4 billion cash payments in 2016 – down from 17.2 billion in 2015 (a decrease of 11%). However despite the decline, cash was still used 25% more often than the second most frequently-used method; debit cards (11.6 billion). During 2016, cash represented almost half (44%) of all payments made by consumers – the second year in a row where consumers used cash for fewer than 50% of all payments. During the same period, cash payments reached £240 billion, accounting for 15% of the total value of consumer spending, a decline of 5% compared to the previous year. More than one in four (26%) consumer cash payments were for a value of £1 or less, and more than three in five (61%) were for a value of £5 or less. 

The average value of a cash payment has increased over the last 10 years from £11.58 in 2006 to £15.80 in 2016 – owing to inflation and changing consumer preferences, as cards are increasingly used to make low-value payments. There were 2.9 million consumers who rarely used cash in 2016, representing 6% of the UK’s adult population. Younger consumers are more likely to be infrequent cash users, with more than one in 10 of those aged 25-34 making one cash payment each month or no cash payment at all. At the opposite end of the scale, there were 2.7 million consumers (5% of the adult population) who relied almost entirely on cash to make their day-to-day payments during 2016. Over the next decade the number of cash payments is forecast to fall by 43% to 8.7 billion payments with the total value predicted to fall by 23% to £185 billion in 2026.

UK Finance, 11 August 2017

Worldwide

Beijing transit opens smartphone payments to all except Apple

Everyone in Beijing can now get on to public transport with the tap of a smartphone — everyone except Apple iPhone users. Beijing’s public transport payments company Yikatong has launched an app that allows most Android smartphone users to pay for journeys by tapping their smartphone rather than their transport card, starting on Monday. The upgrade fits well with the Chinese habit of using smartphones to pay for anything from utility bills to street food, and will serve as a template for transport systems across China. As such, the exclusion of iPhone is a blow for Apple.

Business Insider, 15 August 2017

RailsBank raises $1.2 million in funding

RailsBank, a fintech startup led serial entrepreneur Nigel Verdon that promises to provide access to global banking services with 5 lines of code, has raised $1.2 million in a funding round led by Firestartr. RailsBank says it will enable banks to digitally deliver the services fintech companies desperately need at a low cost; and with a lower compliance risk as conformance with anti-money laundering rules is baked into the platform. Customers will have access to a core digital ledger banking platform and a complete range of ‘Product Rails’, including Iban creation, issuing cards, sending, receiving and converting money, and accessing credit, provided by financial service partners.

FinExtra, 9 August 2017