A few years ago NFC (near field communication) / contactless payments (call it what you will) was being touted as a customer experience game changer, but where are we in 2014?
According to reports, by the end of 2013 there were over 36 million contactless payment cards (credit, charge and debit) in circulation in the UK market. This roughly equates to just over a quarter off all cards out there. But how often have you actually used your contactless card?
My current debit card is the first contactless card I’ve been sent, I say sent because I didn’t request it. From what I remember there was a brief description of what contactless payment is and how to use it, but I didn’t properly read it. After all, who reads letters from their bank?
For months I was under the impression that I’d somehow have to activate the technology before I could use it, and without an idea of how it worked (e.g. payment limits / amount of payments I could make in a day) I had no inclination to try it out.
That changed this week. On my usual lunch run to M&S, with absolutely no cash in my pocket my card got declined after entering my PIN. I tried again with no success – outrage, horror, would I have to run back to the office to borrow money, would I go hungry?! Seeing that the chip on my card looked scratched, I noticed the payment terminal had the contactless logo on it. “Give that a go” I said to the cashier, and boom, with a simple tap, literally in the blink of an eye I’d paid. Success, lunch was saved!
So what’s it like?
Quick, easy, and satisfying is how I’d describe the experience. Since that fateful afternoon earlier this week I’ve been back to M&S a couple of times and have tapped to pay on each occasion. I’m an NFC convert, and owing to the big queues in M&S at lunchtime I wish others were too. Paying with a contactless card is much quicker than getting the right change or entering your PIN – it even seems to authenticate quicker than a PIN transaction does.
Since my first positive experience I’ve been actively on the lookout for opportunities to pay contactlessly. Today I noticed that Starbucks even had an offer of money off if paying via a contactless card. For busy retailers (large or small) reduced queuing time for their customers is an appealing business case for the introduction of contactless terminals. If every customer saved five seconds, that potentially means a lot more customers making purchases (especially when busy)!
The near future of payments
Contactless payments are definitely an evolution in experience terms, rather than the hyped up revolution the banking sector suggested upon launch a few years ago.
The next logical development is surely a move towards more widespread adoption of paying with the tap of your smartphone. However, currently paying with your smartphone requires you to open an app, a sizeable hurdle that contactless cards so elegantly does away with.
Notice how the chap in this Samsung and Mastercard advert (promoting the launch of contactless smartphone payments service in Australia) seems to magically have the app open and ready when he taps to pay.
For me there are also security concerns about having an app on my phone that basically allows my account to be drained of funds simply by being close to something. It feels inherently risky to be using a potential hackable piece of software so overtly in public. Not to mention that there have been known issues with contactless cards. As the BBC reported last summer, some customers (in M&S believe it or not) noticed contactless payments being made from cards further than the supposed limit of 4cm away. The worrying result was payments being taken from unintended cards.
Reluctance or ignorance?
Although I’ve gone contactless because of an improved experience, its use is not widespread. One reason for this assumption is that I think banks have been doing a poor job in communicating what contactless payments are and what they mean for the user. They could improve in two simple ways:
- Clearly and simply explaining what the new logo on their customers’ cards means in terms of benefits and restrictions (I still don’t fully understand what the limits are)
- Allowing customers the option to easily request a contactless card
Banks are not the only ones at fault, retailers could also do with highlighting the benefits – particularly as it’s in their commercial interests to do so. All it would take would be to provide a simple illustration (rather than long winded text of a letter) highlighting basically how contactless payments works. This illustration could be similar to the image below which I spent five minutes mocking up for the purposes of this blog:
The shape of things to come
Even with the benefits clearly highlighted I imagine it’ll be a while before contactless payments become mainstream. I think there’s just something that intrinsically makes people wary when it comes to using new banking and payment technology. For years in the 90s my Mum steered away from using ATMs to withdraw cash, and generally when it comes to our money new technology takes time for people to get used to.
In my case, though I was forced into using it, I enjoyed my experience and I will definitely be confident to pay contactlessly again. If I can get over my security concerns, and phone apps can reduce (rather than require) the amount of faff, I more than look forward to a time when I can lend money from a friend by tapping on their phone, go out on for drinks on a Friday night without my wallet, and be done with the busy lunchtime queues as soon as possible. Have you had any good or bad experiences with contactless technology? If so, please do share them!