This week saw the introduction of an app from Barclays bank that allows customers to transfer money into another bank account simply by entering the recipient’s mobile number. The PingIt app allows registered customers to transfer up to Â£300 at a time directly into the account of another registered user within 30 seconds. According to the bank, uptake from customers has been ‘very pleasing’, with a reported 120,000 downloads in the 5 days since the app was launched.
The introduction of the app comes amid suggestions and evidence that UK consumers are changing their attitude to credit; opting for more flexible payment methods and using debit cards to complete purchases rather than reverting to putting it in the plastic. According to a recent report by PricewaterhouseCoopers, credit card borrowing fell by 5 % last year. Conversely, the use of debit cards grew by 10% in 2011, for the first time becoming used more frequently than cash as a means of payment.
There is further evidence that the credit card seems to be falling out of favour amongst British consumers. Consumers reportedly discarded nearly 1 million credit cards in 2011 and credit card borrowing remained at a steady rate in December, despite the festive season.
There appears to be a growing reluctance to borrow in the future and a different mind-set of the credit consumer. Credit no longer seems to be the preferred option and is not entered into as readily as previously. This may also be because credit isn’t as readily available as it was a few years ago.
According to PwC, UK austerity policies have had a strong influence on consumer confidence and attitudes towards debt in the UK. In short the consumer seems to be taking the lead from the Government in trying to tighten the purse strings and not take on as much credit.
Suddenly, the credit card seems to be a bit of a dinosaur. This generation, particularly those aged between 18 and 24, appear to favour sticking to debit cards, mobile payments and other innovative credit providers, which consumers find to be more convenient and agile. And with the introduction of the PingIt app, the first of potentially many of its kind to come into circulation, this is not predicted to change.
It remains to be seen how the credit industry will continue to evolve but what seems guaranteed is that consumers seem keen to reduce their credit liability across the board.