Much hyped contactless payments may be a long way off from becoming the norm in the UK – despite trials by retailer Boots ahead of a potential roll out at their till-points nationwide – because the recession has delayed both retailers and issuers from investing the technology, finds analyst Datamonitor. But Barclaycard doesn't agree.
Gilles Ubaghs, financial analyst at Datamonitor explains: “Retailers could likely find the cash if they were convinced it was worthwhile, but many don’t seem sure there is any real point. Essentially it is a catch 22 as many consumers aren’t interested in having a contactless payment card when there are still so few places to use it and retailers don’t want to install the technology as so few people have a card.”
However, Datamonitor does believe that there are promising long term signs that the technology could take off but it won’t be as soon as many analysts predict.
“Although contactless payments have been around for nearly 10 years, Barclaycard and London’s Oyster travel card remain the only two high profile companies to offer contactless cards,” Ubaghs continues. “Investment by other issuers is needed, not only in the technology itself, but [also] in educating consumers as well. Consumers will need to be convinced that it is worth their while to use the new technology.
“Importantly,” he adds, “for consumers to be sold on using contactless payments retailers and issuers will need to work together and as this is yet to happen on a large scale. It will be a good deal of time before we’re able to walk into any shop and buy a chocolate bar in the same way as London commuters tap their Oyster cards.”
But not all are quite so sure. Stuart Neal, head of UK payment acceptance at Barclaycard, believes the reverse is true. "Far from delaying the uptake of contactless, the recession has provided an added impetus for retailers to be innovative and offer improved customer service," he says. "Forward thinking retailers that we’re talking with recognise the value of contactless payments – not only does it cut valuable seconds off the length of time it takes to make a transaction, leading to increased sales and a higher footfall, it also increases the average spend per customer.
“We’re looking to actively encourage adoption, so for many retailers the cost of implementing contactless is modest," he continues. "Currently there are 25,000 Barclaycard contactless terminals live and accepting payment across the country and we remain committed to working with retailers and consumers to roll it out across the UK.”