Technology offers win/win opportunities

Richard Armstrong, head of UK payment acceptance at Barclaycard explains why it makes sense to embrace technology and offer your customers the option to settle their bill with a contactless payment

Competition on the high street is tougher now than ever before. You have to ensure that you’re providing a service that meets your customers’ high expectations. Processing orders quickly plays a big part in this.

Contactless payments (CP), whether by card or mobile, are faster than both cash and traditional card transactions, ultimately reducing queues and facilitating potentially greater footfall. What’s more, the cost of cash counting, banking and the endemic problems of staff mistakes and theft are no longer part of the equation.

It won’t be long before customers will expect to be offered the contactless payment option

Payments of £15 and under can be made with contactless cards and contactless mobile phones, making them ideal for lunch, coffee breaks and purchasing drinks. There is a distinct advantage for pubs, clubs, bars and cafés where the majority of payments are likely to be under £15. The main appeal is, of course, the speed of payment, which is crucial in that vital lunch hour when customers are in a rush and likely to abandon purchases if queues are too long. CP is also a popular choice for the business operator because, as with all cards, the average transaction value increases.

While established retailers have been the ones grabbing the CP headlines, the vast majority of contactless terminals installed so far by Barclaycard have actually been in independent establishments or small chain stores. For many small businesses, contactless terminals can be installed as part of the normal rental agreement without additional cost.

Consumer concerns

Consumers are naturally wary of new payment technology. We have put in place several measures to allay concerns. Not only is there a £15 limit on single transactions, but multiple transactions using solely contactless payment can only be made a limited number of times before a customer is prompted for their PIN. To make mobile payments, customers need to upload credit to the app by entering a PIN. Only a maximum of £150 can be held on the phone at a time.

In May 2011 we launched the UK’s first near field communication (NFC) mobile payment system in partnership with Orange. This allows customers to select the level of security they want so that they can opt to enter their PIN every time they make a payment. Most, however, choose not to do this. For these customers, the fact that users need to upload credit to the app ensures their money is safe.

Finally, in the unlikely event of fraud, Barclaycard’s contactless transactions benefit from the same 100% fraud guarantee as standard transactions nationwide; customers would be fully reimbursed for any losses and you, the merchant, will not lose out.

Consumer expectations

Cut queues with contactless payments

As CP becomes more widespread, consumers will increasingly expect to be able to pay for low-value purchases in this way. Several household names have already deployed contactless terminals, including food chains EAT., Little Chef, Pret A Manger and McDonald’s.

In the summer of 2011, pub chain Slug and Lettuce rolled out contactless payment terminals in 80 of its pubs across the UK. The pub chain, part of The Stonegate Pub Company, had previously trialled CP in four of its London pubs and processed 1500 contactless transactions using Barclaycard terminals within a month.

George Wright, head of marketing for The Stonegate Pub Company, said: “The move to contactless will see the end of handling and processing soggy bank notes. Instead customers can pay for goods and services by holding their card, or phone, on a reader, without the need to enter a PIN or sign their name.

“Currently, the average transactional value at Slug and Lettuce is £8.89, making contactless the ideal form of payment for a quick lunch break.”

Time, tide and technology wait for no man

It was as recent as May last year that the Samsung Tocco Lite was launched – the UK’s first mobile capable of making mobile payments. This was swiftly followed in November by the Samsung Wave 578 handset. As we go to press in early 2012, the Google Wallet service is proposing to run pilot projects, followed by a comprehensive roll out in the summer.

At the moment Apple’s plans are carefully under wraps but it seems highly likely that the next iPhone, whenever it might appear, will include NFC technology in some form or other. With products such as these in the pipeline, the technology is rapidly coming into the mainstream and will doubtless soon be part of everyday life.