By Neil Ainger
In an attempt to get into the Olympic spirit I attended the football match at Wembley Stadium in London last night, but my desire to recreate the true football experience with a beer and a pie at the ‘half time’ interval during the games between Senegal and Uruguay and Great Britain and the UAE was thwarted by the failure of the Visa card payment system.
Now admittedly, the fault appears to lie with Wembley Stadium itself and its card processing partner, rather than Visa per se, but the frustration of listening to loud tannoy announcements translating as ‘no food for you matey’ was immense, providing me with yet another reminder that cash is still king in terms of convenience, speed at the till and all round usefulness. Cash won’t let you down with a technology failure, although you may lose some of it out your wallet from time to time, sometimes maliciously.
It is understandable why banks and other financial services players, such as Visa – which removed 27 Link cash machines across London’s Olympics sites before the Games began let’s remember, and replaced them with eight Visa-only ATMs – are keen to encourage the so-called ‘cashless society’. Cash is expensive to transport around the country, you need security guards and vaults to protect it and the money supply constantly has to be refreshed. It is also vulnerable to counterfeiting and presents a large cost burden to banks and others who have to circulate it in the modern economy. If Visa, the banks and other players can replace all that with a card-based payment system, particularly a contactless card or even mobile-based solution which are being extensively marketed at the Games, then they would save a lot of expense. The providers may also potentially be able to charge a small percentage or a merchant fee for low-value payments that typically pass them by at the moment.
Whether retailers, merchants and corporate treasurers would be willing to pay these fees is another matter. The recent opposition to the $7.25bn interchange settlement in the US and growing clamour for change in Europe show how the topic of fees is growing in importance and who wins or loses in the contactless cashless infrastructure that develops in the future is likely to be fiercely fought over.
The success of direct debit cards in Europe show that there is a demand for this type of non-cash service, but the frustration of waiting in line while someone pays for a low-value round of drinks with a time-consuming debit card transaction is well known. Hence, the push towards speedier contactless card or mobile payments that use Near Field Communication (NFC) technology and readers such as Visa’s payWave system or MasterCard’s PayPass Point-of-Sales (PoS) terminals.
Transportation to the Games using the contactless Oyster card system, smartcard access to some arenas, NFC terminals installed in black taxis and contactless payment terminals at food stalls all add up to a concerted push to use the London Olympics to drive consumer uptake and usage of cashless solutions. Another Games sponsor, in the form of Lloyds Banking Group, has also got involved with its Olympic mobile phone launch last year, developed with Samsung and other partners to be used for mobile contactless payments (MCP).
All these mobile and contactless developments are very interesting, as the recent Bobsguide reports from the Telefónica Digital press day in London and the inaugural Mobey Day event in Spain and earlier Mobile World Congress in Barcelona illustrate, but the technology itself is not the only factor. Retail bank customers, card, web and mobile phone users all have to be persuaded to transfer the cash in their wallet into card or smartphone-based payment, loyalty and other schemes if the nirvana of the cashless society is ever to be achieved, and I see very few signs yet of this happening. The technology is trying to find a market at the moment and failing, outside of the usual early adopters and ‘geek freaks’ who tend to rush towards new tech developments.
This is not to say that non-cash alternatives will never come to dominate the payments scene and modern consumer societies. They may well do so in the end, but it is going to take a lot longer than most people imagine. Cash has served mankind for thousands of years, whether in the form of paper notes or shells on the sea shore, and it is not to going to disappear altogether or merely wither on the vine. It has its uses. I, for one, certainly wished I had some last night to assuage my grumbling belly and dry throat with a beer and pie at the Olympic football match.
• For another London Olympics-themed blog please click HERE to read Grant Taylor’s views about how best to ensure security for remote workers looking to avoid the Games queues on London’s congested transport systems.