Public apathetic towards contactless payment
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Financial brands, such as Visa and Mastercard, are keen to forge forward with contactless payments but the latest research shows that that they have a large task to convince the public of the benefits of the technology.
Only 5% of Britons have used a contactless card, while 14% say they have been issued with a card but not yet used the contactless feature, according to the latest resreach from Mintel.
Even those who have used the technology are not overwhelmingly enthusiastic with 29% of those using a card in the days before the research taking place saying they neither agree nor disagree that it is more convenient and nearly 10% say it is less convenient than traditional card payment.
The biggest hurdle for take up of contactless cards is the limited acceptance among retailers and “a lack of a compelling reason to switch from chip and PIN”. This is accompanied by anxiety over security issues.
The research bears out findings by Simpson Carter showcased in Marketing Week’s M-commerce trends analysis.
Toby Clark, head of UK financial services at Mintel, says: “Consumers are not going to be convinced to buy into new payment technology unless the industry can convince them that it is a genuine upgrade to what they’ve already got.”
However, there is a desire for contactless payment via mobile with 8% of UK internet users saying if their mobile operator allowed them to use mobile as a contactless payment service device, they’d apply for the service straight away.
Almost two thirds (62%) of smartphone users would at least consider this kind of payment technology, rising even further to 71% among tablet owners.
Clark says: “Although most people are happy with the status quo, there’s also a good proportion of people who are willing to consider new ways of paying. And if anything, people are even more interested in the additional, non-payment, features that the shift to mobile payments could offer - real-time card balances and alerts, for example, or the ability to store discount vouchers on a handset and apply them at the checkout.”
Readers' comments (4)
Deborah Collier - Echo E-Business | Fri, 4 May 2012 1:56 pm
Interesting research, although I don't agree that its the retailers perception and acceptance which is blocking contactless payments, but more about the consumer and feeling safe using contactless payments - particularly with mobile phones. I'm conducting a poll on LinkedIn mobile phone contactless payments - 54% responded that they'd only use their mobile phone to purchase payments in-store if they used their PIN. Most are concerned about security.
If you are interested in full results and feedback, please view poll here:
http://linkd.in/IfJaXi
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Rob Davies | Fri, 4 May 2012 2:57 pm
Apathy and worries about security are always going to be the main barriers when new payment systems are intorduced. However, the 8% who would like to make payments on their mobiles won't have too long to wait as there is a lot of development work involving near field communications (NFC) being undertaken to bring contactless payments to handsets.
Security is being addressed by the likes of Proxama and ARM to introduce a version of tapping in a PIN to authorise payments. And in places like Japan mobile payments have been embedded.
The 'contactless Olympics' will drive up interest in mobile payments as there will be lots of NFC-led marketing initiatives such as voucher distribution to get consumers used to tapping their phones on posters. Soon we'll all be doing it!
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James Amoroso | Fri, 4 May 2012 3:08 pm
A typical case of technology-driven rather than consumer-driven innovation. Here's something cool. Let's try to sell it! I guess they first need to build the cross-town rollercoaster they show in the TV ad.
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Tony Fogarty | Mon, 7 May 2012 1:48 pm
I've just tried my contactless card a few times recently. I like the idea of not having to carry change. My experience has thrown up three things:
1) Lack of places taking the card. It needs to be universal fast, otherwise it'll never happen. (I asked for one because my local bus company changed the ticket machines. They now have a "contactless" logo on. When I enquired when I could use one I was told "12 months time"?!).
2) Staff awareness where contactless is taken. I've met a few staff members where they've treated me like an alien when I asked to pay contactless.
3) Security "perception". Supposedly the card carries the same protection as chip and pin. If PIN is needed every few transaction, then card theft is much the same as your wallet being stolen with £40-50 in. Assuming the system is secure / underwritten the banks need to start marketing that fact better.
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