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CONTACTLESS Winning the contactless arms race
Contactless technology is finally breaking through, although widespread adoption remains some way off. Hannah Prevett reports
Dartmouth, Paul Horlock, Head of payments at Nationwide Building Society, found himself giving a till operator an inadvertent Apple Pay tutorial. “I tried to use my Apple Pay capability to pay for £34 worth of items and they said, ‘You can’t use it’.” The operator had been confused about the transaction limit on transactions. “It took me five minutes to persuade her to let me make the payment, which went straight through.”
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Horlock’s experience is symptomatic of a wider problem with merchant education, which remains one of the biggest barriers to widespread contactless adoption. “If we’ve got merchant staff out there who don’t know what the technology is on the counters, they’re not going to help customers benefit from it,” he explains.
It also means retailers are missing out on potential upsides, including faster transaction times. “The pass- through rate at check-out is vastly improved [with contactless] and we know from large grocers that’s one of their big issues, trying to get that check-out time down.” He points to Tesco, the UK’s largest supermarket, which he says has seen the benefits of contactless since implementation in 2014. “People are flying through self-service check-outs using contactless.” This is partially down to the education of in-store staff. “Adoption and education of merchants is crucial because as much as we [the banks] talk about it, if customers can’t form the habit, they won’t.”
Education of consumers is as much an issue. Scare stories about cash being extracted from contactless
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cards in commuters’ pockets have resulted in scepticism amongst some. “People have historically been told they should use a PIN for their own security and protection so are suspicious when not required to use one,” says Simon Burrows, Director in PwC’s banking and capital markets consulting team.
Meanwhile, research at Nationwide has shown that 4% of people “still wrap their cards in foil because they’re so concerned,” says Horlock. “There are some terrible myths that are peddled by some of the tabloid press that you’re going to get people walking up to you and ripping off your card with machines in their pockets.” These fears are entirely without foundation, he adds. “There is no evidence of that. We have no reported instances of that happening. We’ve not had customers face that sort of issue.”
Consumers’ fears might be appeased if they were to fully understand the protection afforded by their bank, says Burrows. “Customers don’t understand the fraud refund protection on their cards, that the bank will reimburse them fully for fraudulent transactions, which is a barrier.” Horlock agrees that there is an education gap. “If you lose your card, there is the chance that somebody could pick it up and spend £30, but if it’s a fraudulent use of your card you’re covered by your institution. And you can cancel a card; you can’t cancel cash.”
But in spite of some of the negative press and a reticence amongst some customers, there have been several key developments in take-up in recent years. “TfL’s adoption of contactless across the London transport
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