Security breach

RS
supplement contactless
22 RS February - March 2013
We have contact
Contactless payments have become
more prevalent in the last year with
several high profile roll-outs. Liz Morrell
asks; are we really ready for cashless
shopping?
Contactless payments were supposed revolutionise retail
– especially in high volume, low transaction value outlets
such as supermarket self-service checkouts, fast food
restaurants, convenience stores, as well as for those retailers
looking to reduce the fraud and banking costs of cash.
The limit for such transactions was raised from £15 to £20
last summer, bringing an additional 1,011 million card payments
into scope, with a value of £17 billion according to the UK Cards
Association.
Contactless payments are growing and most banks are now
issuing contactless cards by default. The UK Card Association
says there are now more than 31 million contactless cards in
issue with more than 143,000 contactless terminals deployed.
It estimates there were just under four million contactless
transactions in December 2012, compared with 700,000 in
December 2011 with its value growing from £4 million in
December 2011 to £26 million in December last year and
average transaction value also rising up to £7.04 in December
2012 from £5.55 in 2011.
Visa Europe says that 2012 saw contactless transactions
rise to 2.5 million a month and says this will grow fourfold over
2013. There are some major retailers using the technology –
including Boots, WHSmiths and M&S – whilst food chains such
as McDonalds and Pret a Manger and coffee chains such as Café
Nero are also driving usage. Supermarkets Tesco, Waitrose and
Asdaare in trial.
And yet the number of retailers – and customers – using
the technology is still relatively small. A report published by ICM
Research last December suggested that it was a lack of retailer
support that was hindering its take-up and that retailers were
lax in the instore promotion of the facility.
It also found that though consumer awareness was high
– with eight out of 10 customers knowing what contactless
payments were – fewer knew what the symbol actually
meant and less than a third (32 per cent) of those that have a
contactless payment card actually use it – equating to eight per
cent of all shoppers.
So who is to blame – is it really the retailers’ fault or the
banks? The UK Cards Association says promotion should be
the responsibility of both parties. “It should be a joint effort
between retailers and banks to educate consumers on the
benefits of contactless payment cards. Retailers can play an
important role through the placement of their contactless
terminals and signage, whereas banks
also have a role in raising awareness
of the cards, the acceptance symbol
and the applications process,” says a
spokesman.
Tipping point
Gary Munro, senior consultant at
Consult Hyperion lays some of the
blame with the banks. “The payments
industry has invested a lot of time
and effort in ensuring contactless
payments are safe and secure, yet
they have failed to get that message
across,” says Munro.
He believes habits need to change
and that support is needed for this to
happen. “Education of the cardholder
and retailer will have a lot to do with
the adoption of contactless and to
take it to the tipping point,” he says.
By default there are other nonretail
uses that will also help drive