As a payments professional it’s important to remind yourself that those outside of the industry just don’t think about payments very often, says Sandra Alzetta of Visa Europe, in this bobsguide blogger (aka contributing editor) article about contactless technology. When they do, it’s often either because the payment is getting in the way of them leaving quickly with their purchases, or something has gone wrong.
When questioned about their attitude towards payments, consumers generally tell you that there are three things that are important to them: speed, security and convenience – though not always in that order.
Contactless cards with their tap and go functionality, therefore, seem well placed to meet consumer payment requirements. Since the technology first came to market, Visa Europe has seen steady momentum building in terms of issuance, usage and acceptance of contactless payment cards.
But given the lack of public attention payments generally get as part of busy, time-pressured lives, have contactless payments truly become truly embedded in the consciousness of consumers? Have contactless cards become a mainstream thing, rather than an emerging, technology?
As the year draws to a close, I’ve been thinking about this and whether we will look back on 2013 as the year that contactless payments finally made that transition to the mainstream, having reached a real tipping point.
Have contactless cards reached the mainstream?
Consumer research monitoring the awareness of contactless payment technology frequently reports that recognition levels and understanding of how contactless payments work is increasing. However, as we all know, what people say they do and what they actually do are often two very different things.
Moving from attitudinal to behavioural insight – and I just don’t mean that of consumers – should give a pretty reliable indication of just how mainstream contactless payments have become.
From a Visa perspective, there are now 75 million Visa contactless cards in consumers’ hands across Europe. That’s almost 20% of all Visa cards issued in Europe. However in some markets, such as Slovakia, that penetration figure is as high as 70%.
Visa contactless cards can be used at 1.2 million terminals across Europe. And being used they are. In some markets, such as Poland – a country with 11 million Visa contactless cards – 18 million Visa contactless payments are made each month. In the UK, that figure is now 11 million-a-month – three times higher than this time last year. This behaviour points to contactless cards being issued and accepted at scale, and being used by more than just a select few early adopters.
Beyond the rollout of contactless-enabled cards and terminals and the usage figures, contactless technology has attracted a lot of press attention this year, particularly in UK newspapers. As is always the case with new financial services technology, not all stories have been positive but for me this attention is a clear indicator that contactless payments have ‘crossed the chasm’ into mainstream. It goes without saying that journalists don’t tend to write stories about technology their readers don’t care about.
Contactless card payments successfully in use on London’s transport
Another reason for the press attention in the UK this year might be because one of the most exciting payment acceptance projects in the world is taking place in London, with the UK capital’s Transport for London (TfL) transit authority successfully rolling out contactless card acceptance technology in 2013.
December 2013 marks the first anniversary of contactless payment cards being accepted on all 8,500 of the famous double-decker red London Buses. In one year, with little fanfare, more than 6 million bus journeys have now been paid for with Visa contactless cards. Clearly, consumers are embracing the idea of using the same card that they use to buy a coffee in the morning to pay for their bus ride into work.
Next year, TfL is rolling out contactless payment card acceptance across their entire network, including the tube. From early 2014, UK commuters and other users of the transit authority’s network will be able to use contactless payment cards to pay for travel on the London Underground, the London Overground trains, tram, DLR light railways services and some National Rail services.
Conclusions: Contactless has arrived
Transit operators around the world – some of whom are already planning their own contactless payment card acceptance projects – will be watching London closely to see what sort of impact contactless payment card acceptance has on the daily lives of passengers. Given the scale of the project and the 10 million people who live in the UK capital, it’s difficult to accurately forecast what sort of volumes we’re going to see, but based on what we’ve seen so far this year on the buses, there can be little doubt this an important moment for the rollout of contactless payments.
I’m truly excited about contactless being the technology that has enabled EMV card acceptance to move beyond traditional retail environments into transit. It leads me to think where else can we improve transactional experiences with contactless?
Certainly I believe there’s an opportunity for contactless payments to improve the customer experience across a whole range of unattended terminals. It’s why this year, for instance, we have changed our rules to allow for ‘contactless-only’ acceptance in vending machines.
Of course it’s not just in contactless acceptance that there are exciting, transformational developments taking place. 2013 has also seen commercial launches of Visa mobile contactless applications, including Vodafone’s SmartPass mobile payment service in Spain and Germany towards the end of the year and the mobile space will continue to develop in 2014 and beyond.
Wherever and however contactless issuance, acceptance and usage develop in 2014, including its addition to the mobile channel, I’m convinced that it has a good future. In coming years consumers will view contactless as the de facto way to pay, and I am convinced I will look back on 2013 as the year that the technology truly crossed over into the mainstream.