Consumer Spending

Consumer spending can get a boost with flexi-repayment options

Posted on 15th March 2016

With the UK’s GDP growth averaging between 2% and 3% in 2014 and 2015 respectively coupled with a reduced unemployment rate which was at a 10-year low of a tad above 5%, consumer confidence has been at all-time high. It is estimated that in 2015 more than £29.5 billion of personal loans were availed by UK consumers.

With increasing consumer spending, stronger sterling, ample alternatives available to today’s alpha consumers; a number of payment options have evolved to facilitate their purchases. It is interesting to see whether the UK can emulate the creation of a “cashless society” as has been achieved in Denmark and Iceland and thus a step ahead of its other peers in the value chain of consumer spending.

If the society is supported towards becoming ‘cashless’, there can be multiple benefits like prevention of fraud by using counterfeit notes. We all know that the Bank of England is likely to introduce polymer banknotes during this year along with a unique 12-sided £1 coin which will be brought into circulation during next year.

The recent craze towards being ‘cashless’ amongst the UK consumers is that of mobile payments. This option is duly supported by almost all retailers – especially those in London, who accept payments via mobile phones and thus provide added convenience to their customers.

The availability of Apple Pay has further helped in increasing the usage of mobile payments amongst the consumers globally especially in the UK. Besides Apple, its other peer companies are also shortly launching their mobile payment products in the UK – like Android Pay and Samsung Pay. This will boost the consumer spending in the UK further.

At the same time, the spending limit on contactless cards has been already increased to £30 since last year with record payments through contactless cards reaching to more than £2.25 billion in 2014 compared to the £650 million payments during the previous year. According to Barclaycard, London is leading globally for having the highest number of contactless payments.

With the burgeoning loan burden and likely gradual increase(s) in interest rates, there arises a probability that one falls short of fulfilling the credit liabilities on a short-term basis. Such a default affects the credit rating of the individual which everyone would like to avoid.

As a part of its offerings, we – ‘Peachy’ do act as enablers in meeting the short-term cash crunch situation(s) but unlike others, we believe in offering a flexible repayment schedule depending on an individual’s choice and his other repayment priorities.

It is seen that especially during vacations and festivities seasons, an individual is enthused to make a purchase(s) which likely overshoot his budgets. But due to attractive discounts and other offers, such purchases do justify such spending. Peachy feels that by providing a flexible repayment option, individual(s) can freely take advantage of availing such discounts and other promotion offers and in turn, can repay their outstanding in small amounts in as much as 12 months tenure.

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