Paul Underwood, Managing Director of Thames Card Technology.
It is staggering to write this down, but contactless in the UK is nearly ten! And it’s exciting that ‘tap and go’ payments are going from strength to strength. Since the introduction of contactless cards in September 2007, it has gradually become the payment method of choice for many, as society gradually moves away from cash. More than half of all transactions under £30 are now made using contactless, demonstrating both its popularity and potential.
Indeed, according to the UK Cards Association, 416.3 million contactless transactions totalling £3,913.3 million were made in the UK in April 2017. A remarkable increase of 147.6% on April of the previous year.
But how did we get here and what’s next?
WANT TO BUILD A FINANCIAL EMPIRE?
Subscribe to the Global Banking & Finance Review Newsletter for FREE Get Access to Exclusive Reports to Save Time & Money
By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
Time really is money for busy shoppers who expect to pay quickly and securely, wherever they shop. For this reason, tap and go payments are now less of a novelty and more of a requirement amongst consumers. Paying with contactless shaves seven seconds off the time taken to process a transaction, compared to chip and PIN. To put this into perspective, by 2021 ‘tap and go’ payments are set to save UK shoppers 141 million hours, almost £1 billion in time. Less time queueing delivers a better buying experience and more loyal customers.
Retailers who haven’t been so quick to ‘go contactless’ are even missing out on sales, with three quarters of retailers who do accept touch and go reporting an average of 30% more transactions per day. In addition to this, less sales get abandoned due to long queues!
On the back of this success, many retailers support increasing the spending limit beyond £30. A fifth of merchants retailers would even support raising the limit to £100, more than treble the current limit. This would give consumers even more opportunities to checkout quickly.
Ready, set, ‘tap and go’!
Contactless looks set to continue gaining momentum, with retailers who process card payments mandated to accept it from January 2020. Because of this, contactless spending is projected to rocket by more than 300% in the next four years, bringing us one step closer to a cashless society.
This growth is also being driven by digital wallets like Android Pay, Apple Pay and Samsung Pay. Interestingly here, some digital wallet payments are not constrained to the current £30 contactless limit, provided that retailers have implemented the extra technical requirements to accept Higher Value Payments.
So, the speed, security and convenience of tapping is obviously delivering value to busy shoppers, and it is no surprise that it’s quickly becoming the most popular way to pay. And it’s set to become an even bigger part of our lives as contactless is no longer confined to payments. Other use cases like loyalty are now coming to the fore, giving shoppers an alternative way collect their loyalty points and retailers extra data on their customers’ purchasing habits. It seems the contactless revolution has only just begun.