London goes contactless
Bernhard Lachenmeier, head of products and marketing at SIX Payment Services
The announcement earlier this week by Transport for London that Londoners have paid for more than 700,000 bus fares using their contactless bank cards since the option for contactless payment was introduced three months ago is proof that contactless payment is finally here, says Bernhard Lachenmeier, head of products and marketing at SIX Payment Services. So why does it feel like this isn’t the case?
The Transport for London news comes as the Co-Operative Group becomes the latest retail chain to announce a roll-out of contactless payment terminals across the UK, following the likes of Boots and Superdrug. Organisations are undoubtedly starting to invest real sums into contactless payment technology, and the Transport for London example shows clear consumer demand for contactless payment capability, which would suggest that NFC is finally here.
According to ICM Research the consumer awareness level of contactless cards is 80%, meaning most consumers are aware of the full capabilities of their payment cards. Yet the same research tells us that just one-third of contactless card holders have ever actually made a contactless payment. While I applaud the efforts and investment of the country’s retailers in providing contactless payment facilities, questions need to be asked around what will persuade consumers to make the jump from understanding contactless, to actually being comfortable using contactless.
Unsurprisingly, there are still a number of urban myths doing the rounds about the security of tap payments. Stories of electronic pickpockets who steal card details simply by walking past someone with an NFC-enabled card are enough to put many off the technology. Yet these are, as yet, unfounded rumours. We need a dedicated education campaign, focused on teaching consumers and retail staff – after all, cashiers are the people on the front-line of payment technology – the truth about contactless.
The fact is that consumers are demanding increasing levels of convenience and speed in their day-to-day payments – and contactless offers this. What’s more, we live in a world in which we rely ever more on our plastic payment cards. According to the UK Cards Association, UK consumers spent £3.3 billion more using plastic in December 2012 than in December 2011. Using these cards in a contactless capacity is the natural next step, which is why card schemes, banks and merchants need to work together on an education programme. Greater clarification is needed if contactless is to become a ubiquitous method of payment. Where NFC is concerned; it’s time to go back to school.
