Contactless rethink
[Dave Birch] The contactless experience continues to evolve. I rushed in to WH Smith at Heathrow to grab a pack of pens since I'd forgotten to bring any with. I nip to the POS and notice that a contactless terminal has appeared. Hurrah! It isn't configured properly, of course. What should happen is that the woman scans my pens, presses a button and the contactless terminal lights up for me to tap it or, if I give her cash, she presses another button. What actually happens is that she scans my pens, presses a button, then I ask if I can pay by contactless at which point she presses another button and, after a moment, the terminal lights up for me to tap. The logistical point is this: if you pay with cash, then the cashier has to press a button anyway to open the register. Hence the tender should default to contactless and turn on the reader automagically. Still, grabbing my pens was still quicker with contactless than with chip and PIN or cash.
Unfortunately, negative stories about contactless continue to arrive in my inbox. A friend of mine went into Pret a Manger buy a coffee and a sandwich. Noticing the contactless reader, he asked if he could pay by card. The girl behind the counter pressed a couple of buttons and the reader lit up. He tapped with his card, there was a beep and the lights flashed. "It didn't work", insisted the girl behind the counter. So he paid with his chip and PIN card, thus taking four times as long in the queue as he should have done. "It's not your card," he was told, "they never work."
I thought that a little harsh. Until I stopped in McDonalds on the way back from a meeting. I popped in with a colleague to grab a couple of coffees. I went to tap, but was told that the machine didn't work and so I had to use chip and PIN. Oh well.
On dear. But worse is to follow. Here is a vignette, faithfully reported to me by an eyewitness of impeccable authority. The place: McDonalds' drive-through lane in Staines (or Staines-on-Thames as we now call it). The time: Saturday afternoon. Two women are in a car. They order. The chap on the line says "that'll be £7" or whatever. The woman in the driver's seat taps the contactless payment terminal. Beep. Done.
The gobsmacked passenger (GP) asks "Wow, that was quick. How did you do that?".
The smug driver (SD) replies "With my new debit card, it's like Oyster, you just tap it."
GP: "That's brilliant. I wonder if I can get a card like that."
SD: "What is your bank?".
GP: "It's Barclays". At which point the GP reaches into her bag and produces a Barclays contactless debit card.
SD: "You've already got one" and points at the contactless symbol on the card.
So, despite millions of quid in award-winning advertisements, and despite having undoubtedly received some promotional material and I imagine a leaflet or something with the card, this typical customer had never heard of contactless payments, had no idea what the new symbol on her card was and hadn't a clue that she could use that card for contactless payments.
Something has gone wrong.
Is it just the silly POS configuration and lack of POS terminals in appropriate places? I was certainly pretty frustrated last week when I attempted to live the NFC dream by forgetting my wallet and leaving home armed only with my NFC phone (an Orange "QuickTap" Wave 578). I didn't get very far. I can buy my Arriva bus ticket on the mobile so I got to the station OK but I couldn't buy a train ticket to London because South West Train don't accept contactless at either the manned windows or the machines. I went down to Barclays because I thought maybe I'd be able to use contactless at an ATM (Barclays are the biggest contactless card issuer in the UK and all of their debit cards are contactless) but the ATMs still don't have contactless interfaces. I had to go home and get my wallet, which isn't what I'd been hoping for for 2012.
Maybe what we need to know is to find a few payment environments where contactless means significant, not marginal, improvement in the customer experience and focus contactless efforts on these so that we can simultaneously address the key issues:
Increased consumer awareness and building trust around contactless mobile payments will be key for the widespread adoption of NFC technology in 2012, a recent study has revealed.
According to the study, almost 9 out of 10 (89 percent) of previous users of contactless mobile payments are likely to use the technology again in the near future, highlighting the potential that NFC could offer retailers, brands and providers.
[From The Paypers. Insights in payments.]
What the report says is that people have never heard of contactless and don't trust it, but if you show it to them and get it to use it then they love it and will continue to use it. So to overcome the initial barrier, we need people to see their mates using it rather than Usain Bolt, essentially. Having listened to some interesting case studies about social media this morning at Management World 2012, maybe it's time for the contactless chaps to abandon the flash adverts and get on Facebook, Twitter and Tumblr instead.
These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers
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Couldn't agree more. We don't need to see any more of Usain Bolt.
Posted by: Will Judge on 23/05/2012 at 20:34.
Great so instead of me holding cash my bank will be able to invest it in weapons, 3rd world land grabs, asset stripping and financial speculation.
No-one who wasn't being paid could be so evangelical about this stuff. Be true to yourself, Dave.
[Dave Birch] Just out of curiosity, when you get a £20 note out of the bank, where do you think the twenty quid is? After all, the bank has just given you a piece of paper worth 1p. Holding cash makes no sense: if you want ethical investments, then invest in them.
Posted by: matslats@gmail.com on 23/05/2012 at 21:06.
The problem has always been what is in it for the consumer....other than a slightly more convenient payment process. I don't hear most people complaining about using their card.
Now if there was something in it for the consumer - like a digital receipt, that could be the catalyst for increasing interest and awareness. I hate keeping old paper receipts in a shoe box on the off chance that I may one day need them for a return or warranty. A digital copy would be great.
Posted by: David Horton on 26/05/2012 at 03:55.
You wouldn't believe how much paper-money limits the possibilities for creative accounting, and we're in a crisis, right? We have to be creative.
In the old days (pre-2008) when fractional reserve laws were at least a pretence, My £20 cash withdrawal from a bank leveraged 100 to 1 would shrink the balance sheet by £2000. If I understand correctly, that makes quite a strong incentive for banks to make digital credit more attractive than legal tender cash.
Without fraud the whole financial system would vapourise, so just do your job, take the money and don't rock the boat OK?
[Dave Birch] Fractional reserve relates to bank credit. If the bank has £10 in deposits, it can loan out £100. If it ony has £5 in deposit it can only load out £50. It doesn't make any difference whether you withdraw the £5 in cash or electronically.
Posted by: Matthew Slater on 29/05/2012 at 23:46.