A Finextra member 23 November, 2009, 19:02 0 likes

"As for consumer concerns, these can be addressed by communicating with customers."

What are these concerns, and what makes you confident that only communication is required to assuage them?

I'd have thought that the consumer has quite a few concerns about security, liability, etc., and I'm not sure it is simply a communication issue, but more of one that requires serious thought about the technology, business model, etc..

The other thing is that I understood that, with a contactless payment, the issuer takes the risk if the transaction is below £10 and no PIN has been used.  If I am correct, and as an ex-product manager for a credit card company, I'd be pretty wary about the proliferation of small payments that certain unscrupulous people (and let's face it, there are a lot of them) will start to challenge, which I might end up writing off.  Plays havoc with the profitability.

I think contactless payments as currently set up in the UK either have a credibility problem, or will quickly acquire one, if we are not careful...

A Finextra member 26 November, 2009, 13:34 0 likes

This reminds me of MONEO, the electronic wallet ported on a chip and pin-less card introduced in France which was launched and considered Dead-On-Arrival. For french consumers, Moneo had no added-value since their carte bancaire can pretty much meet all their needs. Additionally, I recall that the 'artisans' (small merchants) in France who supposedly were the target market for MONEO POS terminals were also not interested in accepting MONEO because of the high cost of acceptance.

Consumers, of course, is the entity that would make or break these systems. But again, no matter how many millions of euros have been lost on projects such as this, consumers somehow are never consulted. In the case of MONEO, consumers were not convinced because: it took the form of a card and they already had cards that worked for them; they cannot instantly know how much it contains; it requires reloading; and they considered it less safe than their regular cards. 

In my opinion, contactless transit cards are great. Any service that's based on fixed-fee subscription is great. No reloading, fixed amount of money involved, monthly or annual subscription would be a common feature of contactless cards. But for small payments (such as in an electronic wallet), converting these Moneo cards into contactless cards is hardly going to change the business outcome.

There's also another blog that polls readers if they agree that European cards should only be with the chip. I looked at the members of this organisation that's heading up this study and I don't see any member representing consumers. I don't know what it would take for companies to consult with consumers first but I am guessing that some of these projects are inappropriately funded by 'research' money from governments and thus losing money, sometimes is of no concern.

A Finextra member 27 November, 2009, 12:37 0 likes

Thanks for your interesting comments.

The industry has been telling consumers for the last several years about the security of chip-and-PIN, how it secures your card, etc, so telling them now that they don’t need their PIN for certain transactions kind of contradicts that unless properly communicated.  I’d be interested to hear of any other ideas to assuage any possible security concerns, other than clear communication.

I don’t know whether issuers are liable for transactions below £10 where no PIN has been used.  I guess the potential for abuse by unscrupulous customers must have been factored in by the issuers that Visa estimate will have put 12 million contactless cards into the European market by the end of 2010, and they found there was a business case.

I agree transport use of contactless is great and look forward to Oyster being extended to my local train station. Take up of Oyster has also been high, not least of all because there is a price incentive to use it.  But the take up of contactless open-loop payment cards does depend on both consumers having cards, and merchants accepting them. I think there are  benefits from contactless payments for both parties, and it is only when critical mass on both sides is reached that they will truly take off.