Is going contactless the way of the future?
By UK CreditCards.com
More cardholders are using contactless payment systems at major chains and retailers, a Visa Europe study has found. Contactless payment is only expected to grow in popularity -- and will most likely serve as an important stepping stone that will make smartphone mobile payments more mainstream.
Big retailers stimulate
Contactless payment systems allow customers to scan their cards over a special sensor (such as those used in the London Underground) instead of swiping them through a card reader. No PIN or signature is required for purchases of up to £15, speeding up the payment process. The Visa Europe study found that those who have used such systems value them for their efficiency -- 73% of contactless payment users in the UK believe that the technology will replace cash as the most common payment method in the future.
Contactless payment is on the rise, thanks to chains such as McDonald's, which this year introduced contactless card readers at restaurants across the UK. In fact, because of the fast food giant's adoption of the technology, roughly one-third of UK cardholders have used contactless payment for fast food, according to the Visa Europe study.
However, uptake has still not been as quick as expected. Visa suggests this is at least partially due to the number of shops that have still not adopted the technology. Yet contactless payments could quickly gain a foothold. The number of contactless cards in circulation in the UK is predicted to top 30 million by the end of 2012, according to Mark Austin, head of contactless for Visa Europe. Moreover, thousands of contactless pay terminals will be installed at Olympic venues when London hosts the games this summer, giving many new users a taste of the technology.
According to Austin, "the next 12 months provide an opportunity for the industry to capitalise on contactless payments and further connect with consumers."
Contactless cards as a gateway to mobile payments
If consumers get comfortable with contactless payments, smartphone payments could be next. The Visa Europe study indicates that many see contactless credit card payments as a gateway for making smartphone payments more mainstream.
Smartphone payments can be made using devices equipped with what's called near-field communications (NFC) technology. NFC allows two devices with the proper chips to exchange information. For example, a payment station could get credit card information from a customer's smartphone.
Like contactless card payments, smartphone payments can speed things up at the queue checkout counter. And most (84%) contactless card users believe that contactless payments will be pivotal in bringing mobile payments into the mainstream market, according to the Visa Europe study.
Published: 10 January 2012
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