The way we spend is changing. For the first time ever in the UK, we are now making more electronic than cash payments. In 2014, over half of all our purchases were cashless.
It’s a significant trend. In the last 10 years, the proportion of cash payments made by UK consumers dropped by nearly one third. And trade association Payments UK predict that it will fall another third by 2024.
How is this shift affecting the way we give to charity? For now at least, cash remains king. According to the UK Giving 2014 report by Charities Aid Foundation (CAF), over half of us still give notes and coins. But electronic payments are catching up fast.
Almost one third of donors already give by direct debit, and 29% give online or via debit card. And as new technology makes it ever easier to give without cash, the figures look set to rise.
One of the most potentially groundbreaking payment developments in recent years is the arrival of contactless credit and debit cards – which allow customers to spend up to £20 per transaction (increasing to £30 from September 2015) simply by tapping their card on a payment terminal.
According to the UK Cards Association, there are currently around 58m contactless cards in circulation – 52% more than there were at the end of 2013. Last year, the value of contactless payments more than trebled from £653m in 2013, to £2.32bn.
For the charity sector, the shift away from cash is too big to ignore. But what’s harder to predict is the extent to which we will embrace contactless giving.
Contactless charitable giving
In spring 2015, CAF and Save the Children UK teamed up to learn more. In an 100-day pilot, together with an innovation team from Visa Europe Collab, they trialled mobile contactless collection tins and counter-top donation terminals at a Costa coffee shop, a London shopping centre and tube station, and a music venue in Manchester.
The findings were encouraging. Given the choice between contactless and cash collection tins, 70% of shoppers still preferred donating cash – but 30% gave via contactless cards.
At the coffee shop, one in five people who paid with a contactless card went on to make a donation (this increased to one in two if the barista asked them if they wanted to). The tube station experiment showed the potential for contactless to increase a charity’s average donation – commuters had the choice of giving £1 or £5, and 40% tapped the higher amount.
However, the trials in areas outside of London were less promising. Where people were offered both contactless and cash collection tins, less than 1% of the money raised came via contactless card.
The main learning, says Chris Allwood, head of product development of CAF, is that our willingness to give contactlessly depends heavily on our individual experience and familiarity with the technology.
“If people are used to it, there’s no barrier,” he says. “But it’s linked very closely to the wider penetration of contactless – and that means people actually using the technology, not just having the cards in their wallet.”
For some people, any shift in behaviour will also require more trust. In July, Which? claimed that a security flaw in contactless cards can be “easily and cheaply” exploited for fraud.
For Sarah Pick, head of new ventures of Save the Children UK, contactless is an “interesting territory”, but one that’s still in its relative infancy.
“Contactless is already engrained behaviour for a core demographic of middle-class London commuters – but it’s easy to get caught up in how big that actually is,” she says. “Many people still don’t know what the [contactless] symbol means or have many opportunities to use it.”
Which charities are already using it?
The charity sector too is at an early adopter stage – led predominantly by larger charities, which can afford to test the water. One of the first charity contactless trials was The Royal British Legion’s 2013 Poppy Appeal, which enabled people in Birmingham to tap their cards on tins and posters to donate.
In 2014, the Penny for London campaign, launched as part of the Mayor’s Fund for London, encouraged Londoners to give donate a penny or more every time they used their Oyster card to travel on public transport.
This year, Comic Relief has tested contactless for Red Nose Day, while Oxfam has trialled a series of interactive posters in Henley and Northampton, which triggered an immediate SMS donation to its Strength to Survive campaign.
Cancer Research UK extended this interactive shop-front concept further – enabling anyone passing four of its charity shops earlier this year to tap their contactless cards on the shop window to make an instant payment.
This showed the potential of unstaffed (and anonymous) street giving, but Paul Weaver, digital innovation manager of Cancer Research UK, believes that contactless may also bring significant benefits for face-to-face fundraising – for example, by eliminating the costly and lengthy job of processing tin collections.
For most charities, this is likely to be some way off – and they will need to wait for the technology to spread (and costs to come down) before contactless card donations become more accessible.
But for Allwood , there are still plenty of interesting new cashless opportunities, including recent global technologies – such as Apple Pay and Google Wallet – which have the potential to change the way we give.
Arguably the biggest opportunity with Apple Pay, he suggests, isn’t the novelty of tapping a phone to make a purchase in-store. Instead it’s on the internet, where consumers can buy instantly without entering their credit card details – enabling “one-click donations” online for the first time.
Despite this brave new cashless world, and the many possibilities it may offer charities to diversify their fundraising, Pick warns against losing sight of why people choose to give to charities.
“Just because we’re accepting donations in a contactless way, that doesn’t remove the need [for charities] to present a compelling reason to give,” she says.
“Contactless is amazing, but it’s essentially just a different payment mechanism. We need to remember it’s not just about the technology – it’s about the charity supporter’s experience.”
If you would like to learn more about contactless payments or CAF Donate, an online donation platform please email: talkcafdonate@cafonline.org
Content on this page is paid for and provided by the Charities Aid Foundation sponsor of the Guardian Voluntary Sector Network’s Charity Money hub.
