Future payments - the revolution is here
Digital technology has revolutionised consumer behaviour and will continue to do so, by changing how we interact with people, how we shop and how we donate. Disruption – a word which is often used – is real.
Cash has fallen in its share of total payments in the UK from 62% in 2006, to 40% in 2016 and is predicted to be 21% by 2026. Coffee shops and bars in London (mainly Shoreditch) don’t even take cash! One green mocha turmeric latte might be £5 but forget trying to pay with a note. Even the market stalls near the office have contactless machines. New companies like izettle (recently bought by PayPal for $2.2bn) have entered the UK – izettle is famous for a trial they did in its native Sweden with giving homeless people card readers, and also recently with buskers in London.
We are also seeing the rise of mobile contactless payments with both Apple and Amazon already well positioned here. New 'Challenger Banks' like Starling, Monzo and Revolut, set up following the crash in 2008 are mobile friendly, digital first, flexible, quick to adapt to user needs and are using the latest technology available. My mother-in-law was using Revolut in the summer to transfer money. How soon, it makes you ask, until we see 'Challenger Charities'?
And on to blockchain technology. It can seem quite daunting with it’s 100% transparency, particularly with the work we still need to do on building a positive message across around admin costs, but the opportunities are game-changing.
The Bill and Melinda Gates Foundation is using blockchain technology to help the 2.5 billion people in the world without bank accounts - 2.5 billion! And here we’re talking about many of the world’s most vulnerable. According to the World Bank, 90% of the world’s poor are now covered by mobile signals and this presents us with an incredible opportunity to both reach and help disadvantaged communities.
The UN’s World Food Progamme is trialling a blockchain initiative, Building Blocks, to provide cash transfers to people in need. It has supported 9.3 million people, empowering them to make their own purchasing decisions to relieve hunger. It says it is ‘making cash transfers more efficient, transparent and secure’. So what’s not to like about that? It is really connecting donors and beneficiaries.
The challenge many of us face is where to start and how to ensure our systems are able to take new payments and integrate with our CRMs. Front and back-ends need to talk to each other; we also need to understand our supporters better and provide a personal, tailored service. Artificial Intelligence and smart APIs can help us, but for many that is not something we are yet to really understand.
I am delighted that Martin Wilson, Innovation Scout at the RNLI, has addressed many of these important issues and is happy to share the considerable work he has done on the subject. You can view the details online.
You can also join in on a LinkedIn discussion group.
The Institute is keen to hear from you if you are conducting contactless trials so we are able to both support you in the process and share findings from other organisations. If you are interested in getting involved, please contact Sam Boyle in our Policy team: SamB@institute-of-fundraising.org.uk