Home Internet of Things Aerospace Apparel Energy Defense Health Care Logistics Manufacturing Retail

Access This Premium Content

Options To Access This Article:

What Subscribers Are Saying

  • "Probably the best investment I've ever made."
    Steve Meizlish, President & CEO, MeizCorp Services, Inc.
  • "I have found that RFID Journal provides an objective viewpoint of RFID. It you are looking for a resource that provides insights as to the application and implications of deploying RFID, RFID Journal will meet your needs, It gives you a broad perspective of RFID, beyond the retail supply chain."
    Mike O'Shea, Director of Corporate AutoID/RFID Strategies & Technologies, Kimberly-Clark Corp.
  • "No other source provides the consistent value-added insight that Mark Robert and his staff do. In a world dominated by press release after press release, RFID Journal is developing as the one place to go to make the most sense out of the present and future of RFID in commerce."
    Bob Hurley, Project Leader for RFID, Bayer HealthCare's Consumer Care Division
  • "RFID Journal is the one go-to source for information on the latest in RFID technology."
    Bruce Keim, Director, Hewlett-Packard
  • "RFID Journal is the only source I need to keep up to the minute with the happenings in the RFID world."
    Blair Hawley, VP of Supply Chain, Remington Products Company

Cashless in Europe

Will London's consumers and businesses embrace RFID payment systems? European contactless providers want to know.
By Jonathan Collins
Dec 12, 2007—also known as RFID or cashless—payment systems may not be the talk of the town in London, but they are certainly drawing a good deal of interest. London is the first European city where contactless payments for convenience items have been made available. Back in September, the largest U.K. banks partnered with MasterCard and Visa—the largest credit and debit card companies in the world—to promote the benefits to consumers and retailers alike.

At present, that effort is concentrated in London's Docklands business district, but all concerned stress this is the first phase of a U.K.-wide rollout. And all the involved parties—the credit card companies, European banks and contactless-equipment vendors—are watching the trial closely to see whether the system is ripe for other European cities.

The technology offers benefits to consumers in terms of convenience, and to retailers through faster transactions and increased per-transaction spending. But it is the banks and their card-issuer partners that could see the greatest benefits, because contactless payments promise to eat into traditionally cash-only purchases and increase the number of transactions liable for transaction fees.

Contactless payments will be good only for purchases of £10 ($20) or less, but more than 75 percent of cash payments in the United Kingdom are under £10. A typical target for contactless payments would be a morning coffee, a lunchtime sandwich or an evening paper.

London was chosen as a test market, in part, because contactless ticketing has been an increasingly popular payment option on the city's trains, tubes and buses. Since 2003, more than 14 million Oyster contactless cards, which can hold prepaid amounts as well as season tickets, have been issued. But that familiarity and trust with contactless ticketing may not carry over to cashless payments for convenience items, because while the technology is the same, the two payment methods will remain totally separate.

That's not the case in parts of Asia—most notably in Hong Kong, Japan, South Korea and Taiwan—where contactless payment systems have taken root. Commuters in Hong Kong and Tokyo can use their RFID transit cards to pay for items in retail stores and vending machines. But London commuters will not be able to use their Oyster cards to pay for convenience items, which could have an impact on acceptance.

Contactless proponents also need to win over retailers so they'll invest in payment terminals that will accept contactless payments. But some retailers are likely to wait to see if there's a significant switch in customer behavior from cash to contactless.

Without the ready market of Oyster cardholders to drive payments from the get-go, the banks and card associations supporting the trial are faced with a significant task in the coming year: They have to drum up demand from both consumers and retailers, when neither party is likely to embrace the technology ahead of the other. How well and how quickly they manage to do this will certainly impact the interest in contactless over the channel.

Jonathan Collins, former RFID journal European editor, is now a principal analyst with ABI Research. Based in London, his focus is on contactless commerce and RFID.
To continue reading this article, please log in or choose a purchase option.

Option 1: Become a Premium Member.

One-year subscription, unlimited access to Premium Content: $189

Gain access to all of our premium content and receive 10% off RFID Reports and RFID Events!

Option 2: Purchase access to this specific article.

This article contains 517 words and 1 page. Purchase Price: $19.99

Upgrade now, and you'll get immediate access to:

  • Case Studies

    Our in-dept case-study articles show you, step by step, how early adopters assessed the business case for an application, piloted it and rolled out the technology.

    Free Sample: How Cognizant Cut Costs by Deploying RFID to Track IT Assets

  • Best Practices

    The best way to avoid pitfalls is to know what best practices early adopters have already established. Our best practices have helped hundreds of companies do just that.

  • How-To Articles

    Don’t waste time trying to figure out how to RFID-enable a forklift, or deciding whether to use fixed or mobile readers. Our how-to articles provide practical advice and reliable answers to many implementation questions.

  • Features

    These informative articles focus on adoption issues, standards and other important trends in the RFID industry.

    Free Sample: Europe Is Rolling Out RFID

  • Magazine Articles

    All RFID Journal Premium Subscribers receive our bimonthly RFID Journal print magazine at no extra cost, and also have access to the complete online archive of magazine articles from past years.

Become a member today!

RFID Journal LIVE! RFID in Health Care LIVE! LatAm LIVE! Brasil LIVE! Europe RFID Connect Virtual Events RFID Journal Awards Webinars Presentations