The high street is dying. 1,772 stores closed across the UK in 2018, as a result of more and more money being spent online. In 2018, online sales were expected to make £262bn, with an annual growth of 13.8% on previous years.

This has forced businesses to adapt to a new way of doing things: namely, putting mobile payments firsts, and attracting new customers through an increased use of mobile technology. In this research piece, we’ll examine the decline of high street shopping and the rise of M-commerce, as well as looking at the ways in which businesses have grown to support this emerging market.

By 2021, 50% of online sales will come from mobiles
36.35% of people don't track their mobile spending
42.72% of consumers check prices online whilst shopping

The Death of the High Street

Over the last decade, businesses have been disappearing from the UK’s high streets.

It’s a simple fact that our high streets are no longer the shopping centres they once were. Before internet shopping really found its footing, this was the place that we’d frequent when we needed things outside of groceries, as well as acting as the main social hubs for towns, villages, and cities across the country. The decline of the high street can be directly linked to the increase in mobile and internet shopping, with people finding better prices, better deals, and better options online.

The decline of the high street is self-evident, with large, household brands collapsing at an alarming rate. Woolworths, which went into administration in 2008-09, is often remembered as one of the first victims of an increased reliance on internet shopping, though the actual collapse is more closely connected the financial crisis and subsequent fallout. According to Retail Research, 54 high street retailers went bust in 2008 also – the joint highest number in the past decade – demonstrating the impact the financial crash had.

This has been succeeded by the closure of several major high street brands, including Blockbuster – itself a victim of increased internet competition –  as well as more recent examples such as BHS and Debenhams. However, the damage to the high street cannot be solely regarded in business loss, but also in the effect on workers – between 2017 – 2019 there were 33,000 layoffs in the retail industry as a direct result of falling profits. And this trend is set to continue, with 48 of the remaining 200 ‘large businesses’ that occupy UK high street space being labelled as ‘in danger’, with 53 making a loss in the past three years. What’s more, this is not a trend that applies to big brands alone – small- and medium-sized businesses are also feeling the sting. The Local Data Company estimates that the current vacancy rate of shops is 12.2%, indicating that small businesses are struggling to find a foothold on the nation’s high streets, as well as major stores.

Unfortunately, this is a trend that is expected to continue. According to research, half of the UK’s retailers will disappear between 2020 and 2030, and will be supplanted by online mobile payments, which are set to account for nearly 40% of all retail sales in the same time period.

Given all of the negative data, the prognosis for the high street isn’t particularly good. However, there are some successes being had and measures being taken by businesses to boost engagement with customers – which we’ll get into later. For now, the biggest competitor to the traditional retail model is M-commerce and the online marketplace, which are easier to access and easier to maintain when compared with high street stores.

The Rise of M-Commerce

An in-depth look at how smartphone technology has become integral to the future of the retail sector.

In 2018, M-commerce accounted for nearly 40% of all online shopping sales in the United States, and this is expected to grow in the next few years. Most estimates predict that by 2021, over half of all online retail will be attributed to mobile – and with the increased use of online retailers over traditional high street brands, the volume will also go up.

This demonstrates, quite clearly, how important M-commerce is to the retail landscape, and why it’s such an area of focus for existing and emerging brands. But there are myriad factors that have helped to make M-commerce into a viable option for shoppers, including the improvement in smartphone technology, the emergence of online stores such as Amazon, and the optimisation of web-shops for mobile. This, combined with customer desire for more convenient shopping options and competitive prices, has led to M-commerce becoming a dominant force in the industry.

One area in which the effect of M-commerce on retail can be truly demonstrated is with Black Friday. This annual sales event, primarily centred in America and Europe, is famous for bringing vast amounts of customers in-store, offering discounts before the Christmas rush and increasing revenue before the new year. In fact, it was estimated that 174 million shoppers in the US physically visited a store on Black Friday, in 2018.

Despite being intentionally designed to inject footfall into failing high street chains, Black Friday has also moved online, with traditional retailers having to compete with internet stores for important sales. This has, in a sense, back-fired on retailers, with many chains experiencing irregular online traffic on Black Friday which isn’t reflected in-store. For example, in 2018, Argos received half of its Black Friday orders through its website. While this is still beneficial to the retailer, it further increases the pressure on physical stores, as they struggle to generate the same sales numbers as online counterparts. Springboard, the retail data aggregator, found that footfall was down by 6% on Black Friday 2018, suggesting that it has become a more online-orientated event. This is supported by Debenhams and Superdrug, as both their websites crashed on Black Friday, with people flooding online to take advantage of deals.

While M-commerce has become a vital part of the retail sector, it has a surprisingly low approval rating. According to research done by DynamicYield, only 12% of consumers find mobile shopping convenient, which clearly shows that there is a level of dissatisfaction associated with mobile browsing. This may be due to some retailers not having the appropriate support for mobile web shopping or simply that consumers don’t trust payments through their smartphones compared to in-store shopping or using a PC. Similarly, the conversion rate of mobile shopping is far lower than any other device, with a 0.55% of searches leading to a purchase, compared to 1.54% on tablet and 2.06% on a desktop or laptop.

Apps & Mobile Reward Systems

Despite often being seen as a direct competitor to traditional retail, smartphone payments are being co-opted by some brands in order to boost audience engagement and sales. One way in which this is happening is through the use of mobile phone shopping apps, which allow customers to claim discounts, rewards, and even pay for their items.

A good example of this might be the Starbucks App, which is designed to be an all-purpose hub for customers. Not only can they see the drinks menu and get updated with special offers, it also acts as their loyalty card, allowing them to claim free drinks after they’ve spent a certain amount, and it can be used a mobile wallet that customers load money on to from their debit account. Obviously, coffee is slightly different to other products it’s much harder to just order a cup of coffee online, however, it does demonstrate how major brands are embracing smartphone technology to ensure that customers visit their stores.

To help bridge the gap between traditional retailers and M-commerce, specialist apps have been created to boost the shopping experience for customers. Yoyo partners with a variety of retailers to offer rewards and discounts, as well as informing customers when a sale is on, encouraging them to engage with their high street in new ways. It is also a mobile wallet for users, letting them load money onto the app (or link it to their Mobile Pay system), which they can then spend at partner stores. The app also acts a good market research tool for retailers, allowing them to better understand how their business is performing and letting them take steps to boost sales. In their Café Nero case study, Yoyo show that the app boosted sales and engagement with the Café Nero brand, increasing customer spend by 13% and creating 30% more unique customers.

While mobile wallets or apps may not be the answer for every failing high street, they demonstrate that by embracing M-Commerce, rather than rivalling it, brands can boost audience engagement and possibly find a new one that they couldn’t have reached before.

There is a caveat, however. That being that the sheer over-saturation of the mobile wallet market poses a threat to its effectiveness. With so many being available on the various app stores, customers are likely to become confused or frustrated as they are forced to download multiple wallets to cover all of their favourite brands. This is more likely to lead to none being used than all of them. And if every high street retailer introduced its own app, consumers would quickly become overwhelmed.

UX, Design & Optimisation

On area in which the rise of mobile shopping can really be felt is in the design and user experience of online stores. In 2018, 58% of all website visits were from a mobile device, while smartphones also made up 42% of the total time spent online. This shows a clear shift from desktop use to smartphone internet browsing – as phones become faster, more powerful, and bigger, this will only increase.

The general shift to mobile-first optimisation for websites stems from the idea of Responsive Web Design, a term coined by Ethan Marcotte in 2011. Ian Dunstan, a UX & Design expert who works on mobile web design says:

“Mobile-first started in the early 2000s as a design movement, with the focus being on designing for your smallest possible medium and scaling up to fit everything else. Since then it’s become a business movement, with retailers focussing on developing websites – specifically online stores – with mobile consumers in mind first and foremost.”

In theory, making online stores more mobile-friendly makes it easier for customers to use them without hassle, leading to a reduced bounce rate and increased sales.

Our Independent Research

We surveyed 1,000 shoppers to understand how they used mobile payments and their consumer habits.

We surveyed 1,000 consumers across the UK to get a comprehensive idea of their spending habits and how mobile payments were being used. Overall, these results showed that, while m-commerce is by no means the dominant force in the retail sector, it is becoming a more viable option for consumers, which could be contributing to the decline of the traditional high street.

Our research showed the majority of people that use traditional retail outlets still prefer to pay with cash or card. 25.9% use cash as their primary payment option, while contactless card and Chip & PIN are used by 36.35% and 32.47% of consumers, respectively. Only 4.08% of those surveyed used mobile payments as their preferred option, however, 24.6% use it as their second or third option, demonstrating the increasing popularity of this payment method.

The survey results also support the idea that mobile payments are primarily reserved for smaller payments. Of the respondents, the majority (29.48%) spent less than £20 a week using their smartphone, while 18.82% spent between £20 and £50. We can assume from this data that the majority of these payments were made through a credit/ debit card loaded on to a smartphone, as the contactless payment limit is under £30 and more suited to multiple, small payments. It is also possible that these payments can be attributed to app-based purchases. Just under 10% of consumers said that they spent over £50 a week through their mobile, which can most likely be attributed to large online payments.

For those that don’t use mobile payments at all, the main contributor was that the respondent did not own a smartphone, or that they did not trust the security of mobile payments.

Mobile payments were most frequently used to buy food and drink, with 30.38% of respondents stating this, with various examples including coffee and online delivery services such as Deliveroo and Uber Eats. This further supports the idea of card-loaded payments (Apple Pay, Google Pay, Samsung Pay) or app-based purchases being the main driver of m-commerce. The other most frequent purchases were transport/ travel (12.35%), entertainment (10.36%), and clothing/ cosmetics (20.92%).

One surprising statistic is that 36.35% of survey respondents don’t track their mobile spending. While this could be waved away as a series of small, frequent purchases that you might not otherwise track – for example, if you were using cash instead – it does raise concerns that there is a disconnect between making payments on a mobile and actually ‘registering’ that payment. A vast majority of respondents (63.64%) still do track their payments in some capacity, however, if mobile payments becoming more frequent, the number of people who don’t track their finances could also increase.

Finally, with regard to how m-commerce is damaging traditional retailers, our survey respondents indicated that 6.47% of them ‘always’ check for better prices online when shopping in-store. 17.13% are either ‘likely’ or ‘very likely’ to check prices elsewhere and 19.12% admit they do it ‘sometimes’. If this trend continues, it will further decrease the revenue gains for high street retails as they lose more business to online competition.

The Psychological Impact of Mobile Payments

Mobile payments can be very efficient and useful for consumers, but they also have the potential to do unseen harm.

While the debate about traditional retail and M-commerce rages on, it’s also important to assess the psychological impact that mobile payments have on their frequently making them. We know that shopping can release dopamine, the chemical associated with happiness or a buzz, which, on the surface, seems like a good thing. However, we also know that shopping can become an addiction, and the ability to buy anything at any time through our smartphones could have a huge impact on how we shop.

One major issue that seems to have arisen from M-commerce is that it makes shopping 24-hour. Unlike in previous decades, when you physically had to be in the high street to do the majority of your shopping, you can now do it from anywhere, as long as you have an internet connection.

Research conducted on Alipay, China’s most popular mobile payment platform, showed that since the introduction of M-commerce, overall transaction amount has increased by 2.4%. Transaction frequency also increased by 23%. This indicates that the introduction of mobile payments has had an impact on people’s spending habits, with the increased availability leading to an increased spend.

What’s interesting is that the purchases made aren’t representative of what would’ve been bought without mobile payments. Yuqian Xu, a professor of business administration at Illinois, and head researcher stated:

“Switching to the mobile channel leads to more shopping overall, and it particularly affects more hedonistic shopping such as food, entertainment and travel. But it doesn’t affect purchases like education or health care. So, it’s changing consumer behaviour.”

Essentially, more money is being spent, through mobile payments, on ‘non-essential’ items, which can have unintended impacts on the lives of consumers.

Furthermore, the  International Journal of Economic Science, which looked at the effect of contactless payment on spending, found that stores that implemented Point of Sale (POS) systems increased spending by a 8% for credit cards and 10% for debit cards. In his conclusion, research lead, Tobias Trütsch, stipulates that advancements in POS technology will only increase consumer spending. This is particularly interesting from an M-commerce perspective, as it suggests that the increased use of mobile payment methods – such as Apple Pay, Yoyo Wallet, and others – at POS will further increase purchase frequency from consumers.

While the increase in purchases is good news for retailers, it could have potentially damaging effects for customers. Concerns surrounding these issues point to the idea that those that are more at risk of addiction could be vulnerable to the impact for mobile payments.

What’s more, even those that don’t suffer with addiction, are still at risk of psychological changes due to mobile payments. For example, the ease of mobile payments creates a cognitive dissonance between the consumer and their money; when everything is just a tap away, where you don’t have to continually put in transaction details, the impact of the payment becomes less effective. Also, research shows that those that use mobile payments do not track their finances as much as those who don’t. This ties in to the idea that there’s a disconnect between consumers and POS transactions and online mobile payments.

Mobile Technology in Shops

Despite increased competition from online retailers, some business are embracing mobile technology.

Despite the decline in major high street stores, some retailers are embracing mobile technology in order to drive sales and offer alternative options to a changing consumer base. This is something we’ve seen before; businesses were slow to adopt card payments when the appeared, but in 2017, card payments overtook cash as the primary way in which customers purchase low-value items. We could be seeing the same trend with mobile payments.

However, this does contradict what the majority of small businesses seem to want. According to the UK Card Association, 70% of small business owners prefer to take cash payments over card or mobile. But considering that there is an element of cost associated with card and mobile transactions, this isn’t much of a surprise. As mobile payments become the norm for consumers, this way of thinking will have to change for small and medium sized business to keep up with their competition.

Luckily, technology is being developed to make mobile transaction easier to handle for retailers – such as small POS systems from Square, iZettle, and SumUp, among others. These are particularly popular among small, mobile businesses outside of the traditional retail structure, such as pop-up stores or market stalls. Where these would have been cash-only establishments previously, cutting out a significant consumer base – 45% of customers would leave a shop if it didn’t take card payment and they didn’t have cash on them – POS readers allow them to engage with a new audience and increase their revenue.

With regards to how smaller POS systems can help business thrive, iZettle stated:

“We started out by launching the iZettle Reader to help merchants accept card payments, as well as cash, on-the-go, without having to sign-up to long contracts or pay high fees. Since then, we’ve expanded our one-stop-shop to offer a range of tools, from cash advances that help small businesses expand and grow, to our E-commerce product  that allows them to sell online and through social media channels. The iZettle Reader allows small business owners to accept payments via cash, chip and pin, contactless and wearable technology. Merchants can use the iZettle Reader wherever they are selling – whether that’s in a physical store, in a pop-up or at a trade fair. All you need is 3G, 4G or WiFi and a smartphone or tablet. Today, 1000 new small businesses sign-up to use iZettle’s tools every day, from fashion designers and coffee shop owners to restaurants and florists.”

While it’s easy to look at the impact of smartphones on retailers and see the negatives, mobile technology is also allowing smaller businesses to reach new markets and offer new ways to pay. This is a huge benefit to both consumers and retailers, and shows how M-commerce can work alongside traditional payment methods.

Security and Mobile Payments

In the past there have been concerns around mobile payment security – but are actually true?

One of the biggest drawbacks of mobile payments – and what’s presumably stopping it from becoming the dominant force in the market – is the lack of trust from consumers. Specifically, many consumers are concerned that M-commerce is less secure than traditional payment methods such as debit cards and cash. However, with 68% of customers expected to make more than half of their payments digitally within the next two years, this is something that appears to be less of a an issue of those already familiar with the technology.

Presumably, the lack of trust around mobile payments is due to them being relatively new – especially compared to traditional payment methods. This is somewhat reflected in how comfortable general users are with mobile payment authentication. The 2017 US Consumer Payment Study found that while 69% of mobile payment users were comfortable with a passcode as authentication for their purchase, only 34% were comfortable with voice recognition. While this holds m-commerce payments back from developing further – for example, by making payments through an AI assistant – it also demonstrates that people are concerned about security. To alleviate the fears surrounding mobile payments, iZettle insist that their technology is one of the safety payment methods in circulation:

“The technology uses the same security features as Chip & PIN and with a £30 cap in the UK on transactions, is regarded as highly anti-fraud. Cardholders have zero liability if their tap card is used without their authorisation. At iZettle, we, of course, comply with the highest security standards for contactless payments in our industry and perform thorough security checks of every merchant who wish to onboard to our system. Working together with issuers, authorities and card networks we use robust fraud detection systems and artificial intelligence to spot suspicious activity and stop fraud in its tracks.”

This general distrust of mobile payments is also generational, as over 10% of those under the age of 45 (in 2017) have loaded a credit or debit card on to their smartphone. As you might expect, this number decreases as ages go up.

Despite the general distrust, mobile payment security does have some positives, but also negatives, when compared to traditional payment methods:


  • Mobile payments rely on near-field communication (NFC) to send payments from a smartphone to a card reader. This is basically the same as a contactless debit card. The big difference, however, is that in order to authorise a transaction, the phone needs to be unlocked, usually with a passcode or a fingerprint. Unlikely a contactless card, this prevents mobile payments being made if your phone is stolen.
  • Mobile payments use ‘tokenisation’ during transactions. This is a unique, specially-encrypted number which represents your chosen debit/ credit card associated with your phone, and not the actual number of your card. This essentially means that it’s much harder for data thieves to hijack the transaction and steal your debit card information.
  • Any payment information on the smartphone is held on a secure chip, which benefits from enhanced security.
  • Your preferred payment method also benefits from in-built safety feature on your device. In particular, Android devices have SafetyNet, developed by Google, which automatically checks whether a device has been tampered with. If it finds that it has, it locks certain features from the user, including mobile payment. So, if your device is stolen and the thief attempts to hack your information, your device will prevent hat from happening.


  • While security has gotten better, there are some more general concerns about the security of mobile devices, especially if they hold personal data. In 2015, 48% of Mobile Payment Security Experts said that mobile payments were not secure.
  • One flaw that has been exposed in Apple Pay is that even a stolen credit/debit card number can be loaded onto an Apple device, allowing thieves to make encrypted payments from potentially any device.
  • Some issues also relate to mobile devices specifically. For example, your device could be vulnerable if you use public Wi-Fi or Bluetooth, which can allow hackers to gain access to your personal information. However, with the specific security features mentioned, your loaded credit/debit card should be safe.

Best Mobile Card Readers for Small Businesses

Point-of-Sale (POS) card readers are becoming an invaluable tool for smaller businesses. In this article, we look at the best mobile card readers you can invest in, with their different features, advantages, and rates.

How to Make Your Smartphone Payments More Secure

A big reason why mobile payments are yet t become a dominant force in the retail sector is because consumer mistrust about their security. In that case, let’s look at some of the best ways you can make your phone more secure for purchases.