New research from Moneyhub reveals payment pain points
14% have been paid incorrectly by their employer
One in ten (10%) have given up depositing money into a new account because it was too difficult to set up a payment
Current payment methods are still subject to human error and worries according to new research from Moneyhub, the market-leading data and payments platform. Moneyhub’s research revealed that close to one in 10 (9%) have accidentally transferred money to the wrong recipient.
A further 8% said they have received money from someone they didn’t expect, or didn’t know, while 14% have been paid incorrectly by their employer in the past.
Setting up Direct Debits or paying money through banking apps can be open to human error, with the payer having to input the recipient’s banking details manually. This can lead to payments going awry. Despite this, paying manually through a banking app overwhelmingly remains the first choice for the majority of UK consumers with over half (53%) of people choosing to pay their friends manually via their banking app, and 41% moving money between their own accounts with this method.
Moneyhub’s research also highlighted a number of barriers to transferring money online between friends and family, or to other personal accounts. 16% say they have been uncomfortable or worried about sending money via bank transfer. This is most common amongst young people 21% of 18-24 year olds and 23% of 25-34 year olds.
Manually inputting bank details has even put off people from paying their friends or family, or transferring money between accounts, with one in ten (10%) saying they have given up depositing money into a new account because it was too difficult to set up a payment. This rises to 19% for those aged 18-34 years old.
A third of people pointed out that they have often set up a new payee on their banking app only to pay them once or twice, despite the effort of setting the details up.
However, Moneyhub points out that new methods of payment can be much smoother and less cumbersome for consumers. Account to Account payments using Open Banking allows the user to pay directly from one bank account to the other using a QR code or link. This removes the need to manually input details and therefore the risk of human error.
51% of respondents had heard of Account to Account payments before completing the survey, with 15% using this method to transfer money between their personal accounts. This increases to 21% for those in their twenties, and 19% for those in their thirties.
A third of all consumers (32.5%) state that they would be more likely to use a business if they offered Open Banking payments as an option, rising to 45% of consumers saying they would be comfortable using Open Banking payments for regular payments such as utility bills.
Mark Munson, MD of Payments at Moneyhub comments: “We all know that slight unease when setting up a new recipient in your banking app, particularly if you are sending over a large sum of money. And for too long there was no alternative to manually doing so, but we know that this can lead to issues with one in every ten people accidentally paying the wrong person. Account to Account payments remove the worry that has been associated with payments for too long, providing security and peace of mind when transferring small or big sums of money. The recipient can simply share a link or QR code and from there the payer can pay directly into their account without having to input anything further.
“Innovation within payments isn’t new, we’ve moved from cash and cheque to payment by card or direct debit and now to Account to Account payment via mobile banking apps, it’s only natural that we keep evolving, solving the challenges of what has come before and creating a more secure payments landscape in the UK. It’s not just younger generations that are jumping on board with these new payment types with over 60% of consumers under 60 regularly using their mobile banking app as the primary engagement method with their bank and we expect Account to Account payments to keep building market share. Financial services providers that offer this type of payment will therefore benefit, adding value to their customers.”