IBS Journal June 2016


33


Android Pay have certainly helped nudge things in the right direction. We are now a world leader in payments technology, argues Horlock. “In the UK we’ve become a bit of a barometer for other countries. We have technologies that are only now going live in other parts of the world,” he says, pointing to the US as an example of a country that remains far behind the UK in the contactless arms race. “The technology just isn’t really there yet because they’re not [even] completely rolled out with EMV and chip and PIN. If you get a new card in the States you still expect to swipe it. It’s not going to help the adoption. The UK is really leading in the way we have pushed payment technology on.”


He makes an important point that most banks in the UK now issue cards as a standard reissue. This has really helped to drive adoption amongst Nationwide customers, though Horlock admits the building society was initially slow off the starting blocks. “We’ve been late getting there because we had so many other priorities but we’ve now issued something like 4.9 million contactless cards. Between seven and ten transactions in every 100 are now contactless rather than chip and PIN. We think we’re going to get to one in three in the next one or two years.”


Nationwide has been able to make large strides in recent months because of the reissue cycle. “We issue contactless cards on renewal and we have quite a big renewal cycle coming up. By the end of this year we’ll


cover most of our customer base in terms of those current accounts. We’re not live yet on credit cards but that is coming,” says Horlock.


Customers of the building society have the option to opt- out of contactless, but Horlock stresses the number of customers who do that are “miniscule…Even customers who do question it, once they start using it they say, ‘I want to keep it, I like it.’”


Burrows argues there is no reason for customers to steer clear. “Given a customer is only liable if their contactless card is used negligently (rather than fraudulently) there is little good reason to opt out, even if you always use your PIN.”


So, if contactless use becomes ubiquitous, what’s next on the horizon for payments technology? Will we follow in the same footsteps as a high-tech office block in Sweden, Epicenter, which has put an RFID chip under the skin of employees, allowing them an easy way to gain access to the building, use facilities such as the photocopier and pay for snacks and drinks in the cafe? “There may be a human rights issue with that,” jokes Horlock.


Burrows agrees that RFID chips implanted in the body are “not very attractive” but could serve other purposes. “Absolutely why can’t every car have an RFID chip which allows for rapid payment of vehicle fuel costs, road tolls, traffic fines etc?” he ponders.


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