Ollie's World - Tales from the platform - an informal look at contactless payments

It seems that contactless is the word of the week in the payments industry, everyone is talking about it, but no one is quite sure what they are going to do about it, I guess everyone is waiting to see who jumps first.

Personally I think that it is a fantastic idea and has the potential to remove lots of little irritations from everyday life, and the one that really bugs me is queuing (which you will have picked up on if you read last quarter's article on hand held POS terminals). Let me walk you through my average journey into London (where 25% of all card transactions occur apparently).

I park at the station at about 7.15am, pay my £4 to get into the car park - this has to be cash as the man in the little hut hasn't even got a till, he is simply armed with a sheaf of sticky tickets for the windscreen. After squelching my way down to the ticket office (without fail the only space left is at the far end of the car park and involves stepping out of the car into a puddle) and buying my ticket (with a card) I always get lured across to the other side of the station by the smell of freshly ground coffee and can only stare longingly at the culinary delights behind the glass of the pseudo French Cafe.

I would buy a coffee and one of those cookies that are still soft in the middle but I spent all of my cash on parking the car. So I walk away and sit on the platform with a rumbling stomach and without my caffeine hit. I know that it's not just me that goes through this, at every station everywhere you see people pull a handful of change out of their pocket, perform a quick mental count and then walking away wistfully, after all who wants to put a £1.89p coffee on their card? Imagine how much additional trade that coffee shop would get if they had a contactless reader on the counter, those 'walk-aways' that haven't quite got enough cash could just tap their wallet on the counter and 'walk away' happy and fed after a second's worth of transaction. All the people that only had enough change for a coffee have upgraded to coffee and a muffin and a handful of others have bought coffees for their colleagues - just because they are no longer restricted by how much loose change they have in their pocket.

Fast forward to lunch time, I always get my lunch from the high street pharmaceutical retailer that has a convenient sandwich counter at the front of the shop. Unfortunately, so does everyone else and I invariably fall into line at the till just behind an 'unprepared shopper'. Everyone has come across an unprepared shopper at some point. They are in a world of their own all the way to the front of the queue and then they act surprised when they are asked for payment. Much fumbling ensues as they try to find enough cash, resort to a card, can't decide which one to use, forget their PIN, switch back to the nice shiny silver one and then finally pay for their lunch. Behind them the queue is building, and passing trade is going to the nice little deli round the corner because they don't want to wait.

In a contactless-enabled world that shopper's transaction would have taken place in half a second (not counting fumbling to get the wallet out of their handbag or pocket - some things cannot be fixed with technology) and the number of people at the till would be shrinking, not growing.

EMV based contactless payments is very much in its infancy with only a couple of pilots going on globally at the moment. STS will be launching their contactless module at the end of Q2 in readiness for the UK summer pilot and it will be loaded with many of the same features as their better known modules such as Emvelink. Support will be available for the market leading contactless readers straight away with more to follow.

Tuesday, May 1, 2007