It's no surprise that London topped the chart of "Cashless Capitals" in a recent study, considering its status as a major fintech hub of the U.K. But this wasn't enough to make it the country's contactless capital.

Contactless payments were first introduced to London in 2007, with Visa and Mastercard each providing their own branded option. It took two years for contactless to migrate outside the capital, and another five to secure substantial adoption across the U.K.

Chart: The capital of contactless payments

But this head start wasn't enough to give London the lead over Bristol, which is responsible for about 3% of the U.K.’s card transactions. Bristol was crowned the Contactless Capital for processing the highest proportion of contactless payments in the U.K., according to the merchant services provider Payment Sense.

Ten years after its introduction, contactless technology is everywhere in the U.K., from supermarkets to restaurants, from car parks to buses, at the pharmacy or at concerts. Even the Church of Scotland is considering contactless payments.

Fraud figures double in the U.K.
The number of U.K.-issued contactless cards doubled to 119 million by December 2017 from 59 million in 2015. The maximum limit for a single transaction is £30 — a figure that has not changed since autumn 2015.

And while contactless spending was on the rise, U.K. fraud losses doubled to £14 million in 2016 from £6.9 million in 2015, according to Financial Fraud Action U.K.

These fraud numbers, while climbing, are still relatively low. Using 2015 fraud numbers, Financial Fraud Action U.K. stated that contactless fraud accounted for just 1% of all card fraud.

One way that scammers steal from contactless cards is by card skimming. Criminals carry card-cloning devices and secretly scan pockets to steal card details or to effect a tap-and-pay transaction and take up to £30 from the unwitting victim. Contactless card sleeves, designed to block unwanted transactions from card skimmers, are one way for consumers to thwart this threat.

Comparing contactless payments adoption in U.S. vs U.K.
In the United States, adoption of contactless payments has been significantly delayed. Despite being the home of Apple and Google mobile wallets — not to mention the birthplace of wearables — contactless payments are only now on the rise in the U.S. (after a short-lived effort that ended in 2011 when JPMorgan Chase dropped its "blink" contactless brand).

An estimated 1.2 billion cards are in circulation in the U.S., and manufacturing costs are said to have played a part in the U.S. issuers’ decision to delay the adoption of contactless payment technology.

But the time is now right for America to jump on the contactless bandwagon.

The original EMV chip-and-PIN cards, first issued across the U.S. in 2014, are finally up for replacement. Some issuers, such as Capital One and Wells Fargo, are replacing these with contactless cards.

Starting in late 2018, New Yorkers will pay their transport fares as Londoners do, by waving smartphones or contactless credit or debit cards at the subway turnstiles or the fareboxes on buses.

But it will be some time before the U.S. catches up with Canada and the U.K., let alone Sweden, the country expected to become the world’s first truly cashless society. Just 1% of the value of all payments in Sweden were made using physical currency last year.

A study by Stockholm’s KTH Royal Institute of Technology has predicted cash could be history there by 2030.

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