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Where next for contactless?

In the last week or so we have seen announcements from PKO Bank Polski and Intesa Sanpaolo about their plans to roll out contactless to their customers, with PKO Polski reporting that 6 million cards will be replaced in the project.

However, there do seem to be mixed views in the market about the short to medium term growth of contactless.

While some banks, such as these two or Barclays in the UK, believe that contactless is a good way to strengthen their relationships with their customers, and increase transactions volumes, there are still many banks who haven’t yet taken that first step.

Contactless cards are only valuable if they can be used. It will be interesting to see what effect initiatives like the one announced by Visa to enable 550 Coca-Cola vending machines at the Winter Olympics to accept Visa payWave will have on the growth of contactless and its value as a payment method of the future.

Banks have to make the decision about the best way to encourage their customers to remain loyal and active card holders – weighing up the possible benefits and customer demand against other initiatives they could choose to invest in.

Intesa Sanpaolo, PKO Polski and Barclays have embraced contactless and I wish them every success as they lead their respective countries’ drive towards the new technology.

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Comments: (1)

A Finextra member
A Finextra member 10 February, 2010, 11:43Be the first to give this comment the thumbs up 0 likes

It boils down to consumer awareness and availability of service.

Most Cardholders in the UK appear not to realise what payWave or PayPass is.

The majority of Merchants I've visited that have contactless terminals often do not realise what they are or how they work - the training probably went to Coffee or Doughnut Shop Manager who do not end up as the end user/operators.

For contactless to become a success more consumer information is needed, more cards in distribution and greater Merchant Acceptance.  I think when they merge contactless payments into Mobile Phone handsets - this will be the tipping point to greater consumer acceptance and broader usage - I'd fully expect to see Telefonica do something in this space over the next few years (their "O2 Money" card must be a pre-requisite step towards this type of service).

Paul Love

Paul Love

VP Business Development

Konsentus

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23 Jul 2009

Location

Nottingham

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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