 Contactless Payment Cards
In response to a growing recognition of the need for a modern solution to a regular exchange of small amounts of cash, some of the major banking institutions have launched new contactless payment card solutions. There are a variety of cards on offer including Mastercard Paypass and Barclaycard One Touch, but most combine the benefits of debit and credit cards with some also including other uses such as the Oyster travel card. Could cash ever become a thing of the past?
High Expectations
Back in the early part of 2007, the RBS had predicted the take up of retailers to their One Touch payment cards to reach 100,000 by the end of 2008. However, towards the end of the 2007, it was clear that the take-up was going to be slower than predicted. An initial entry point into their usage was taken up at Canary Wharf by both RBS and Barclaycard. The idea for both was to facilitate the speedy processing of low value items. To this end, RBS provided free upgraded tills to accept contactless payments to small retail outlets which use bank owned terminals. One of the stumbling blocks to the initiation of the solution has been that larger retailers need to upgrade existing terminals – taking time and costing money. Less Grind at Coffee Republic
Where the system has taken off most rapidly has been in outlets such as large franchised providers of low cost items. This has particularly been the case in the large coffee shop chains. For example, Coffee Republic has recently undergone a four month trial of the product and is now aiming to roll the system out across their entire franchisee corporation. In fact, by the end of the trial, one in five credit card transactions at the Canary Wharf outlet were claimed to be contactless. On average, about 100 contactless transactions were made every month - equivalent to a share of 18 percent of all credit card payments made. In areas of high traffic, contactless payments helped relieve heavy customer flow during the peak hours. No PIN Necessary
This obviously has ramifications for the whole sector and it’s expected that over the course of the next few years, many other major café chains, taxi services, sandwich bars, service stations and the like will follow suit. The contactless solution developed by Commidea, a leading card payment processing supplier, recently enabled a leading café outlet to offer its customers a fast and convenient method of payment on all transactions of £10 and under. With 350,000 customers per week and an average transaction value of less than £5, the cafe was ideally positioned to benefit from the technology. Cardholders simply need to touch their card against the reader instead of entering a PIN or signing. The transaction is secure, offers both the retailer and customer a faster transaction time and shorter queues, and takes away the hassle of handling loose change. The benefits of the system to the consumer are obvious – less time spent queuing, no fumbling for change. The benefits to the retailer are: • Instant access to money and therefore profitability
• Increased visibility
• An enhanced ability to measure spend patterns
• Frees up Accounts Department
• Less chance of fraud
• Less time of personnel spent at the till At a time where many retailers are struggling to balance their books, the introduction of a contactless payment scheme could prove to be a useful tool to give that competitive edge. Furthermore, the collapse of a retail institution such as Woolworth’s serves as a stark reminder that you have to stay ahead of the game. Providers:
Mastercard Paypass
Barclaycard One Touch
RBS
Commidea |
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