Monday, 20 February 2012

The year of the contactless card?

A NatWest leaflet arrives in the post. "It's time for a change. Don't let cash slow you down," it says. The leaflet folds out into a snazzy contactless promo. There's no need for cash and it takes less than a second to pay (erm, hang on a minute, are you sure about that?)

The contactless camp are making much of the fact that, thanks to the sterling work of Visa, the London Olympics will be a cash free event. And on the back of that, contactless will finally take off in the UK and be embraced by retailers and consumers. Certainly, it has been given a boost by Transport for London's announcement that users of London's buses will be able to touch and pay in time for the start of the Games. The system will also this year be rolled out to the tube, Docklands Light Railway and overground network.

But let's face facts, in the context of the global cards and payments industry, the London Olympics is little more than a blip. It's a small sporting occasion being held in east London. One that will hopefully generate some good PR, but ultimately a niche event which will matter little in the grand scheme of things.

The NatWest leaflet also tells me that I can use my card to get instant coffee and fast food. McDonald's is one of the few retailers to have truly embraced contactless. Last year, it rolled the system out in all of its 1,200 UK stores. I'm reliably informed that it currently accounts for around 50 per cent of transactions in this country. Which sounds about right. Not enough retailers are getting onboard and many of those with terminals installed don't seem that interested. We've all been in an EAT or Pret and seen a queue of people waiting to pay with cash or debit/credit cards, whilst the contactless terminal sits there ignored and unloved. Or in the case of an EAT regularly frequented by your's truly, upside down and broken.

The banks should also shoulder some of the blame. Barclays/Barclaycard has lead the way in this area – almost all its credit and debit cards are now contactless – but others have been less keen. However, after a slow start I think the banks are now doing a good job in promoting this technology to their customers and in working with other parties to get it into the mainstream. Royal Bank of Scotland, for instance, is looking to increase the number of contactless debit and credit cards in issue during 2012, with an initial focus on London and the south east (hence the NatWest leaflet). 

The prospects for contactless have improved markedly in the last year but there is still some way to go before the 'no need for cash' boast becomes a reality. The Olympics will come and go but the same old issues will remain - poor user experiences, lack of consumer awareness, retailer apathy and the fact that many people still like and trust cash. In all likelihood, it will take the arrival of NFC-based mobile payments to make the contactless dream fly. 

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