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Contactless has a much bigger foe than security: Apathy

Retailers are very pragmatic people. If something makes sense, works well and solves real problems, they’ll adopt it. Otherwise, no chance. While the banking community hypes up contactless cards and mobile payments, retailers in the US are saying something different.

Evan Schuman of StorefrontBacktalk writes about the problems he ran into when he tried using his contactless card:

“Taking some cabs in New York City this month, I was thrilled to see the contactless devices in the backseat, only to be told by three different cabbies to not use them because customers were complaining about getting double-billed.

"Cynically, I thought, maybe the cabbies have some financial incentive to poo-poo the wireless cards.

"This week, visiting three different grocery chains in New Jersey, tried unsuccessfully to use my contactless card there. The first time, a cashier looked at me as I asked about using my contactless card.

"It never works," she said. In what way? "It will take the card and then tell you that the card's been declined. But if you then slide it (magstripe scan), it will instantly go through." Showing kinship with Iowans, I tried it. Sure enough, it errored in the exact way the cashier had described.

"I deliberately tried the same effort at two other chains, discovering the same problem, with cashiers and managers telling me that it's common.”

Right now, contactless doesn’t solve significant problems for retailers. It’s not addressing meaningful pains. Without that, retailers won’t get excited.

“Contactless has a much bigger foe than antennae-equipped cyberthieves or malfunctioning POS interfaces,” writes Evan Schuman. “Apathy.”

Comments: (2)

A Finextra member
A Finextra member 17 March, 2008, 03:37Be the first to give this comment the thumbs up 0 likes I saw a sign in a coffee shop (Tim Hortons - largest in Canada) indicating debit was no longer accepted becuase it slowed down customer service.   Finally a good compelling reason that supports the merchant and the consumer who just wants his cup of coffee. 
A Finextra member
A Finextra member 17 March, 2008, 13:42Be the first to give this comment the thumbs up 0 likes Contactless payments...we see it as a brief  but vital stop on the road to mobile payments. Our research shows that security is not likely to be a knockout punch in the mind of consumers (any more than any other new technology). I agree that the questionable value proposition is the current issue, for both merchant and cardholder, and short of some rewards program that would create an artificial incentive, Javelin believes that contactless rollouts need to be planned as a stepping stone to mobile payments adoption.

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