The U.K.’s redesigned five pound note will be released Tuesday, but research suggests the move by the British central bank is out of tune with the current landscape of consumer payments.
In June the Bank of England introduced a plastic banknote featuring Sir Winston Churchill on one side, claiming it is cleaner, safer and longer-lasting. Made of polymer instead of paper, it can ostensibly withstand wear and tear from dirt, moisture, folding, crumpling and even a machine wash better than the old paper note.
But a third of U.K. consumers believe cash will become obsolete by 2020, according to a Research Now survey of 2,500, and 30% of U.K. respondents in a study conducted by Worldpay indicated they only use cash "if they absolutely have to.” The U.K has shown a propensity to adopt new payments methods. London's transit system, for example, has an open digital payment system that it's hoping to export to transportation systems in other countries.
The Worldpay research also shows the proliferation of Apple Pay and Android Pay has led 67% of 16- to 34-year-olds to leave their wallets at home and opt to use digital payments. Some 54% of consumers suggested they expect their smartphones to take over cards as the main method of payment in the next five years.
These trends are partly driven by the increasing popularity of contactless payments at big retailers, with a quarter of U.K. consumers polled claiming to avoid shops that don't accept cards.