This image was taken by swisscan on Flickr
According to the UK Cards Association, there are approximately 32.5 million contactless cards in use in the UK (1). They are now issued as standard by all the major banks and are accepted at almost 150K contactless terminals belonging to merchants of all sizes from independent local shops to major supermarkets. The growth of contactless payments is being built on solid foundations.
Contactless cards are designed with small transactions in mind
The aim of contactless technology is to displace cash as the preferred method of payment for low-value transactions. It provides the benefits of speed simplicity and convenience to both cardholders and retailers. One of the major attractions of contactless technology is the sheer speed of it. Most contactless transactions are simply a matter of touching a card against a reader. For security reasons, cardholders may occasionally be asked to enter a PIN, but this is the exception rather than the rule. The contactless process is not only substantially quicker than the chip-and-PIN process, but also swifter than the cash-handling process. In addition contactless transactions are simpler for both cardholders and staff. For example, when contactless is used instead of cash, it eliminates the need for staff to count in money and provide change, it also helps to reduce the possibility of human error. This is particularly helpful in high-volume environments, where staff may feel under pressure because of queues.
Contactless transactions are perfect for vending machines
Vending machines selling drinks, snacks and other low-value items are a common sight throughout the world. However, they are also an attractive target for thieves, which is why the companies which manage them have to be very careful about where they are located. Switching to contactless not only makes the machines less attractive to thieves but can also reduce maintenance requirements – for example contactless transactions do not jam the way that coin-handling mechanisms can.
Contactless cards can replace travel cards
The move to accepting contactless payment cards on the London Transport network has been a significant step change in the contactless journey. Today, contactless cards can be used to pay for single bus trips in the capital and plans are underway to roll out contactless payment card acceptance to the other areas of the London transport network, such as the Tube, the DLR, the trams and the overground.
In November 2012, a survey of 2,050 public transport users in the London area showed 77% support an alternative payment method on London’s transport network (2). It also showed that 46% of those surveyed identified contactless payments as their method of choice (2). There are obvious reasons for this. TfL actively discourages the use of cash as a payment method for security reasons and cash fares are significantly higher than non-cash fares. At the same time, there are many people who do not need to have travel cards as they only use public transport on an occasional basis. They do not want to have money sitting on an Oyster card for long periods just in case they might need it. Contactless payments are the perfect solution to this problem.
It’s also worth noting that, as contactless technology is based on chip technology, it is possible to integrate actual travel cards into contactless cards, which not only eliminates the need to carry a separate travel card, but also means that if the main travel card needs to be topped-up, this can be done automatically during the touch-in/touch-out process, thereby reducing ticketing queues.
In short, contactless cards provide a compelling and secure alternative to cash for low-value transactions, particularly in environments where there is a high volume of traffic.
Charlene is a keen blogger who enjoys writing about technology and topics which affect small business owners.