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Contactless cards – are they the future of payments?

2 MIN READ 4th March 2016
person paying using an iphone

UK consumers have millions of contactless payment cards, so why haven’t they changed the way retail transactions are made?

In some ways it’s surprising contactless payment is not yet the norm in the UK – we all hear plenty of talk about how consumer behaviour is constantly evolving and how keen shoppers are to embrace all manner of new technology.

“Benefits include cutting queues, increasing service efficiency and avoiding staff handling cash”

About 20 million cards in the UK are contactless and the ability to make contactless payments for transactions under £20 is offered by retailers such as Marks & Spencer, Boots, The Co-operative and Waitrose are rolling the option out, and it is offered in food chains McDonald’s and Eat.

The awareness level of contactless cards is around 80%, according to research carried out for Retail Week by ICM Research in January, and yet two-thirds of the respondents have never made a contactless payment. “Consumers know the ability is there,” says Richard Moller, a researcher from ICM’s retail team. “But it has been a slow burner for retailers.”

While, perhaps predictably, younger consumers are already embracing it, with almost one third of 18 to 34 year olds with a contactless card making at least one contactless payment a week, Moller believes that widespread take-up is being held back by a lack of information about how to use contactless technology.

But there are signs this is starting to change. Boots, working with Visa, intends to roll out contactless across its UK stores following a successful launch in more than 600 of its largest shops, while Waitrose will offer contactless in all of its stores by the summer. Natasha Toothill, head of retailer engagement at Visa Europe, believes the tipping point will be reached in 2013.

“Visa contactless card numbers will reach 34 million in the UK this year,” she explains. “In the past, it has been limited to low value transactions, predominantly in the quick service industry. But now retailers see it as a way of offering something more – the wow factor. They see the operational benefits.”

Such benefits include a lower cost to retailers for handling contactless payments of less than £20, cutting queues, increasing service efficiency and avoiding staff handling cash. She explains: “I know at McDonalds, one of the largest users, they don’t want staff handling cash and food at the same time.”

 

Read the full article: http://www.retail-week.com/technology/analysis-contactless-cards-are-they-the-future-for-payments/5046397.article?blocktitle=In-Depth&contentID=5965

Source: Retail Week

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