Contactless payment capabilities at checkouts have been available for longer than the average consumer will realise. Indeed, some Mobil gas stations were using such technology as far back as 1997. However, it is only in last few years that contactless payments have really come to the fore, as more and more retail business have updated their point of sale software to allow for such transactions. The truth is that many consumers will still not have made use of the option of contactless payments.
So has it really impacted on the retail world and what changes can we expect it to influence in the coming months and years?
Overview of technology
The purpose of contactless payments is to allow the consumer to pay for their items without having to insert their debit or credit card, before entering a PIN or signing. Instead they can simply wave their card over a scanner, which enables a more rapid payment, whether they are using a regular or self-service checkout. Faster transactions mean that queues at the checkouts are shorter and move faster.
The business benefits in the fact that they do not need as many members of staff to process the same number of transactions.
Influence so far
If you haven’t yet made use of contactless payments, there is a good chance that you won’t have consciously noticed its influence. However, you will certainly have benefitted from the fact that some of your fellow consumers are making use of the system. As already mentioned, checkout queues can be shorter. In addition, a reduction in staffing overheads means that businesses are able to offer more competitively priced goods.
That said, contactless technology has in no way reached its potential and in the next few years, as more businesses modernise their point of sale software, its impact should become more apparent.
Whilst not as important as changes to point of sale software, another factor that will help make contactless payments more prominent is advancements made by the banks. Once such improvement is currently being made by Barclaycard; who have introduced a new stick-on credit card called a PayTag.
The card is around 25% the size of a standard version and is intended to be stuck onto the back of mobile phones. The fact that the consumer does not have to dig around in their wallet or purse looking for their card can increase the speed of transactions even further. Although the card will only be offered to a select few customers for trial in May 2012 – it is envisaged that all Barclaycard holders will have access to the PayTag in the near future, should they wish to make use of it.
Another change that could see to more contactless transactions – at least in the UK – is increasing the payment limit from GBP 15 up to GBP 20. And with many transport providers now looking at integrating contactless technology into their payment techniques, the travel network could soon be easier to negotiate.
In summary, it is fair to say that the impact of contactless technology hasn’t been as widespread as many predicted. However, improvement to systems on the banks’ side, combined with a number of larger retailers facilitating contactless payments, means that the technology will become increasingly influential in the coming years.