Lack of retailer support hindering UK contactless take up - ICM

Despite the fact that most Brits are now au fait with contactless technology, few ever use their tap and pay cards and retailers are doing little to encourage take up, according to ICM Research.

  2 4 comments

Lack of retailer support hindering UK contactless take up - ICM

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

A poll of 2001 consumers shows that 80% know what contactless payments are. A quarter have tap and pay cards themselves, although a significant minority of these were not aware of the fact until prompted to check.

Having been first to introduce contactless cards and then pump funds into advertising, Barclays is the brand most associated with tap and pay, cited by half of respondents and 70% of its own customers.

Despite the high awareness, less than a third of those that have a contactless payment card use it at all. When they do use it, it's infrequently - just 12% buy something this way weekly or more often, - with half spending £10 or less on their most recent transaction.

ICM argues that one reason for disparity between awareness and usage is a lack of support from retailers. The firm carried out mystery shopping tests on 26 high street stores and found that only 11 offer contactless payments and, of these, just three visibly promoted the capability.

With Christmas approaching, the company suggests that retailers should take advantage of the fact that the technology can slash queuing time - a boost for both shoppers and merchants at one of the busiest times of the year.

Jamie Belnikoff, associate director, ICM, says: "As our mystery shopping visits have shown, the main challenge sits with retailers who have the opportunity to take advantage of high consumer awareness and appetite, much of which has been built by financial services providers. As retailers educate both staff and customers about 'wave and pay' technology, people will make contactless payments more often."

Sponsored [On-Demand Webinar] Solving the KYC challenge with end-to-end processes

Related Company

Comments: (4)

A Finextra member 

Contactless was initially a bank led initiative with little retailer engagement and support. Pricing was too high, purchase thresholds too low. Despite this the card issuers have steamed ahead issuing contactless cards by the thousand in the hope that enough mass will be generated that retailers will start to engage and accept it. Given time, most large retailers will start to accept contactless - but in their own time and only when their existing pin entry devices need updating.

The raising of the transaction thresholds are a positive move and welcomed. In the meantime the card acquirers should be encouraging those organisations where customers will really appreciate the benefits of 'tap & go' - principally car parking and vending to accept the card.

.... and why is it always retailers who are expected to 'sell' the benefits?

A Finextra member 

What is the point in introducing contactless payment in stores that already offer chip&pin. How much faster can a transaction be made  in a F2F store with contactless taking into account that customer servicing also needs to take place? And is the cardholder asking for the faster payment service since there is the handling of the goods purchased, exchanging greetings with the cashier... that take some time anyway. It is a different thing for new environments where chip&pin may be cumbersome like in commuter busses, taxis, vending machines, in-flight payments and other places where cash has dominated for practical reasons. Who is going to pay contactless in the supermarket if the value is less than 15:- and use chip&pin if it is above... As a consumer I focus on my consumption and so much on the payment technology.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Contactless POS for Express Checkout and existing Chip-and-PIN POS for normal checkout might be the optimum combination. 

Paul Davidson

Paul Davidson Consultant at Expense Reduction Analysts

"What's in it for me?" - when a new product or service takes off, it's because both the consumer and the seller can clearly see what's in it for them - and they like it.

To me, NFC still seems like a solution looking for a problem. When the contactless terminals accept my payment immediately, it is quicker - but that's not often the case.

Perhaps NFC is actually an element of a much larger change which consumers and retailers will find valuable - with mobiles in place of cards and coupons enticing you with an offer which hits your personal sweet spot?  

Making payments easier and more rewarding can create a genuine commercial advantage - you can spot this by tracking the empty baskets on 3D-Secure sites.

With two notable exceptions, I don't yet see my merchant clients linking their marketing, operations and finance teams to create a compelling experience for customers as part of their strategic plans.

So how close are we to this being a reality?

 

 

 

[New Report] Managing Fraud Risks with Synthetic Data: A Practical Approach for Businesses ServicesFinextra Promoted[New Report] Managing Fraud Risks with Synthetic Data: A Practical Approach for Businesses Services Industry