Despite the fact that most Brits are now au fait with contactless technology, few ever use their tap and pay cards and retailers are doing little to encourage take up, according to ICM Research.
Contactless was initially a bank led initiative with little retailer engagement and support. Pricing was too high, purchase thresholds too low. Despite this the card issuers have steamed ahead issuing contactless cards by the thousand in the hope that enough
mass will be generated that retailers will start to engage and accept it. Given time, most large retailers will start to accept contactless - but in their own time and only when their existing pin entry devices need updating.
The raising of the transaction thresholds are a positive move and welcomed. In the meantime the card acquirers should be encouraging those organisations where customers will really appreciate the benefits of 'tap & go' - principally car parking and vending
to accept the card.
.... and why is it always retailers who are expected to 'sell' the benefits?
What is the point in introducing contactless payment in stores that already offer chip&pin. How much faster can a transaction be made in a F2F store with contactless taking into account that customer servicing also needs to take place? And is the cardholder
asking for the faster payment service since there is the handling of the goods purchased, exchanging greetings with the cashier... that take some time anyway. It is a different thing for new environments where chip&pin may be cumbersome like in commuter busses,
taxis, vending machines, in-flight payments and other places where cash has dominated for practical reasons. Who is going to pay contactless in the supermarket if the value is less than 15:- and use chip&pin if it is above... As a consumer I focus on my consumption
and so much on the payment technology.
Contactless POS for Express Checkout and existing Chip-and-PIN POS for normal checkout might be the optimum combination.
"What's in it for me?" - when a new product or service takes off, it's because both the consumer and the seller can clearly see what's in it for them - and they like it.
To me, NFC still seems like a solution looking for a problem. When the contactless terminals accept my payment immediately, it is quicker - but that's not often the case.
Perhaps NFC is actually an element of a much larger change which consumers and retailers will find valuable - with mobiles in place of cards and coupons enticing you with an offer which hits your personal sweet spot?
Making payments easier and more rewarding can create a genuine commercial advantage - you can spot this by tracking the empty baskets on 3D-Secure sites.
With two notable exceptions, I don't yet see my merchant clients linking their marketing, operations and finance teams to create a compelling experience for customers as part of their strategic plans.
So how close are we to this being a reality?
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© Finextra Research 2015