Have you joined the contactless revolution yet? There are now 34.5 million ‘contactless’ cards in circulation, carrying out eight million transactions every month. And numbers are steadily growing as retailers rush to join the bandwagon. So, what are contactless cards, how safe are they and what are the advantages of using them?
The system works using radio frequency identification technology (RFID) – similar to that used for Oyster cards – which allows card holders to ‘tap’ their debit or credit cards against a terminal to pay for transactions up to the value of £20.
It was designed to deliver a quicker and more efficient payment method for small transactions that would save time for customers and retailers. It also allows customers to monitor more of their spending, as all transactions are itemised on statements.
The service has not gone without a few hiccups. Shortly after M&S installed the contactless payment system across 644 stores earlier this year, some customers reported that the terminals had inadvertently taken payments from cards held much further away.
And this is a particular problem when customers are accustomed to ‘swiping’ their entire wallet for the one contactless card to be registered.
Contactless cards can now be used to pay for bus journeys in London, with passengers receiving the discounted Oyster fare. But they will encounter problems if they raise a wallet or cardholder containing more than one contactless card towards the payment terminal.
Additional concerns about security remain, as customers are only rarely asked to enter a PIN. If a card goes missing, it’s fairly easily for a fraudulent user to rack up a number of small-value transactions.
But this is guaranteed by the banks, says Dave Birch of Consult Hyperion, which makes it even safer than cash.
If somebody stole my wallet right now, it’s got my contactless Visa card in it and it’s got £20 in it. I’ll never see that £20 again, whereas if some miscreant steals my card and goes and buys a few coffees with it, the bank will give me the money back. The bank’s promise is unequivocal. So, to me, that’s as safe as it gets.
With more retailers coming on board, it will be difficult to avoid the new age of transaction technology.
So why not learn more about the benefits? Check out this informative video (transcript below) for more details.
Some eight million contactless transactions are made every month across the UK, with numbers increasing rapidly over the last twelve months, thanks to the support of high-street retailers, and despite initial concerns about security of contactless payments.
To me as a customer, contactless payments are completely safe. Just think of what would happen if somebody stole my wallet right now: it’s got my contactless Visa card in it and it’s got £20 in it. I’ll never see that £20 again, whereas if some miscreant steals my card and goes and buys a few coffees with it, the bank will give me the money back. The bank’s promise is unequivocal. So, to me, that’s as safe as it gets.
I think the public were a little slow to pick up on it, you know… Possibly we as an industry didn’t do quite enough education at the beginning. Quite a lot of people got their new cards, but didn’t really realise what you could do with them. It’s only now that they see other people tapping that they start tapping themselves. And because survey after survey has shown that people think tapping is the easiest way to buy things, once they’ve tried it, then absolutely no problem.
So, it’s been a slow start, but if you look at the figures, it’s going up pretty quickly now.
Dave Birch, Consult Hyperion
Retailers of all types have been quick to embrace the idea of contactless payment.
Technology is clearly changing the way in which customers interact in the retail environment. It’s changing the way we view products, research products, compare products, and then pay for products. Our investment in contactless payment is all about changing the way customers pay at checkout.
We’ve had overwhelmingly positive feedback around contactless payment in our stores, so we have over 250,000 customers a week using contactless payment in M&S stores and we only see that number growing.
Benjy Meyer, Marks & Spencer
Normal card has to ring confirmation. It takes about 30-40 seconds. When you’re busy, that 30-40 seconds, it helps a lot. In the beginning, I used to get one or two customers a week, now I get 30-40 customers a day [using] contactless.
Murak Cimener, Piccolo Deli
Sandra Alzetta is head of the business unit at Visa that has been at the forefront of advances in contactless technology.
Contactless payments have been specifically developed to be highly secure, so we’ve used the same technology for contactless payments that we’ve used for chip and PIN transactions – world leading technology.
London Buses, I think, is a fantastic example where they’ve started accepting contactless payments, so people now don’t have to worry about having the right change. They simply tap their card. Very easy. Very convenient.
And in addition, very importantly, it helps from a budgeting perspective. Many people tell us when they take cash out of an ATM, they’ll often say “I have no idea what I did with that cash”. With contactless payments, you’re actually seeing on your statement exactly how you’re spending your money.
Sandra Alzetta, Visa Europe
As more cards and terminals become available, we should start to see a real breakthrough in the number of people making full use of this new technology. With leading retailers such as Marks & Spencer, McDonald’s, and W.H. Smith as well as pubs and public transport already geared up for contactless transactions, it looks certain this is the way forward.
You see other people using it and it just becomes normal. It’s getting over that hurdle of realising it is actually safe and you’re not going to be parting with money that you didn’t want to.
I just love how fast it is. It’s just easy.
Because it’s very easy to pay for things, you know? Like coffees and things that are low [value] transaction.
Hate having to put a PIN in, so that’s really good.
So what’s next is mobile. Contactless payments with plastic are very much a stepping stone into the future of payments which will be very much focused on mobile. So that means simply tapping your mobile phone against a terminal for low-value payments, or for high value, putting your pass-code into your mobile phone to prove who you are and then tapping that against the terminal.
Why is that so exciting? It’s because we know that consumers like simply using their mobile phone instead of having to worry about separate plastic payments. It means that they can have electronic receipts, which are incredibly helpful; being able to see your debit balance, being able to see how much credit you have left; being able to very easily top up a pre-paid card. HUGE step in the right direction. Much more convenience for our consumers.
When it comes down to it, the phone is the one device that everybody has. So I don’t think it’s a particularly radical prediction to say that when you bring contactless and phones together, people will find that as a very attractive way of paying.