Most news regarding contactless-payment technology centers around retail merchants, terminal makers or telecommunication companies as major players.

But the operator of the United Kingdom’s postal service made waves June 1 by announcing its intention to incorporate contactless-payment acceptance throughout its entire network, making it the largest such deployment to unfold in Europe.

Starting June 6 and through the end of October, the postal agency intends to install more than 30,000 contactless terminals in 11,500 post office branches throughout the UK. Nearly 200 branches surrounding various 2012 Olympic Games sites in London will be the first to get the new terminals, the UK Post Office Ltd. stated in a press release.

The post office sites will accommodate the contactless function of MasterCard Worldwide’s PayPass and Visa Inc.’s payWave cards for payments up to £20 (US$30.92) as well as those from NFC chip-equipped smartphones, the post office stated.

But does the postal agency’s commitment to contactless target the consumers most likely to have NFC-enabled phones or contactless payment cards? One industry analyst isn’t so sure.

The demographic profile of those who buy stamps or other goods at the post office, or who stop in to send packages, tends to involve elderly consumers or those collecting state benefits, Gareth Lodge, a London-based industry analyst with Celent, tells PaymentsSource.

“Neither of these are core markets for NFC usage,” Lodge contends.

As an example, Lodge claims he buys his stamps while at the supermarket and tends to do most other shipping-related tasks online.

However, any contactless-payment rollout is critical to gain widespread acceptance of the payment method, he adds. Because of the project’s large scale and, in effect, converting post office terminals to “convenience-store type outlets with an NFC option” has to be a positive development, Lodge says.

“While I think this will help [with contactless exposure], I don’t think it’s a catalyst for an explosion in growth,” Lodge suggests.

The project will place contactless-payment acceptance within 3 miles of 99% of the UK population, the post office noted in its release.

“Contactless will bring huge benefits to our customers by increasing choice and reducing transaction times,” Lesley Sewell, Post Office chief information officer, stated in the release.

MasterCard and Visa Europe executives were understandably supportive of the initiative.

“This announcement marks a major milestone in making that technology even more widely available across the UK,” Mark Austin, Visa Europe head of contactless, stated in the release.

Marion King, president of MasterCard UK and Ireland, was equally as pleased. “We’re delighted the post office is joining us in our vision of a world beyond cash and offering more people in the UK the opportunity to use this safe, simple and smart way to pay,” King said.

The press release did not indicate which terminal maker would provide the new terminals.

What do you think about this? Send us your feedback. Click Here.


Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry