U.K. consumers have been able to "tap & pay" with their contactless cards for nearly eight years now.
Barclaycard issued its first contactless cards as early as 2008 and EAT became the first restaurant chain to accept this simpler, quicker form of payment. The U.K. is one of the key success stories for contactless, but what have we achieved?
The technology has faced a great deal of scepticism over the years. As recently as 2013, a Which? poll found that 92% of its 665 respondents thought that their bank should let them opt out of receiving a contactless card. Many had reservations regarding possible fraud, or the ramifications of losing their cards.
With few instances of consumer-reported fraud and a great deal of education from the banks, these fears have been allayed and the UK has embraced the technology.
The UK Cards Association puts the total number of contactless enabled cards in the market at in excess of 58 million. In December 2014, about $460 million was spent in the U.K. using contactless, representing a 25% increase on the previous month and 330.8% over the year. On top of this, there are now more than 215,000 contactless enabled payment terminals where consumers can "tap & pay." Both the user base and the acceptance infrastructure are growing exponentially.
And this is not just meaningless data, the rise of contactless is being driven by tangible benefits. Stats released earlier this year showed that contactless has saved U.K. consumers almost a century at the checkouts and Transport for London reports that more than 1.2m contactless transactions are made each day on its network, making it the fastest growing contactless merchant in the UK.
On the other side of the fence, we too have seen significant growth in demand for the manufacture of contactless products and services. Close to 70% of our customers are also going straight to contactless for new products, a trend that is particularly popular in the prepaid market.
To put it simply, we’re going to see more growth in usage, number of transactions and volumes. This will be supported by this week's spending limit increase to near $50.
With the average supermarket spend coming in at about $35, a lot more transactions are going to be made using contactless. Other plans are also afoot. Ideas currently in consultation would see London black cabs obliged to accept contactless which would, again, open up a huge market for the technology. Initiatives like this will bring even greater usage and awareness and I’m sure we’ll be reporting even more impressive figures next year.
With all of the hype surrounding the as-yet-unrealised golden age of mobile payments, you could be forgiven for thinking that cards are on their way out. In reality, certainly here in the UK, this could not be further from the truth. Those that want the convenience of contactless need look no further than the card in their pocket.
Paul Underwood is Managing Director of Thames Card Technology.