Consumer Jitters Aside, U.K. Merchants Ready for Contactless Payments

Part of the uncertainty may be due to multiple deployments under various names. "There's been a lot of mixed messages around branding," Barker says. The chip-and-PIN cards (contact cards containing a microchip that stores data more securely than a magnetic stripe and is, therefore, more difficult to counterfeit) have been widely accepted, he claims, in part because they are provided under a single company logo. On the other hand, contactless cards have been provided and tested by Visa, MasterCard and American Express with multiple banks and retailers, under such names as MasterCard PayPass, Visa PayWave, MasterCard Tap 'N Go and One Pulse, to name a few.

"It seems a bit confusing," Barker says. He predicts that banks and credit card companies will begin to collaborate in the future, releasing contactless card payments under a single name. "From what I see and hear," he states, "there is sufficient commitment from banks for that."

Kevin Smith

Because the economy has been struggling, Barker says, contactless cards have not been released as quickly as had once been anticipated.

Fear of increased vulnerability to fraud with contactless cards, Barker says, is unfounded, however. "You do need to be aware of your cards and look after them as you would look after your cash," he says, though he adds that "losing a contactless card is not the same as losing a 20-pound note." That's because the cards often require a PIN at the time of transaction, and if someone were able to use a card, there would be a record of such transactions, which a bank could then investigate.

The CCP survey also found that nine out of 10 consumers don't feel there has been sufficient communication from banks regarding this new form of payment. Kevin Smith, Visa Europe's VP of acceptance development, agrees that there needs to be more education for consumers, much of which he predicts will occur in the coming months and years as more banks provide cards with contactless chips embedded, and as more merchants begin providing contactless services.

According to Smith, Visa Europe's launch of PayWave in London, in the fall of 2007 (see RFID Payment Platforms Gaining Momentum), proved that consumers adapt very quickly to new technology. Cardholders responded favorably, he adds—not only to the speed and convenience, but also to the innovation of the technology. From that deployment, Visa Europe learned "just how savvy the consumers have become," Smith says, noting that they had a fairly clear understanding of how the technology worked once they began using it.

In addition to continuing the proliferation of contactless cards issued by banks, Smith says, "the challenge is to continue the rollout at the point-of-sale." All major High Street banks in the United Kingdom offer contactless cards, he notes, and all have begun trialing them with merchants, most commonly in London.