When I was interviewing Christian Lunden from Nordic Choice Hotels for a podcast about their NFC pilot (using mobile phones as room keys) he mentioned in passing that some bars in Sweden have reacted against the introduction of chip and PIN by refusing to accept cards and going back to cash. This is because with chip and PIN the bar staff have to hand a the POS device to the customer, the customer has to insert the card and then enter the PIN, and this all takes far too long. Under the old (ie, US) scheme, the customer would hand over their card to be swiped at POS and then the bar staff would hand back the card with the a receipt for signature. I don’t understand why this was quicker, except I suppose that the bar staff could start working on the next order while waiting for the signature.
The bar owners have now started installing ATM machines (the ATM operators pay rent to the bar owners) so that drinkers can get cash. In a way, you can see that this makes sense for the bar owners. Unfortunately it doesn’t make sense for society, but since the bar owners are allowed to externalise the costs of their payment preference, why would they do any different?
Sweden has far more cash-in-transit robberies than its neighbours and suggests an alignment of the private and social costs: the cost of armed robberies, [the deputy governor of the Bank of Sweden] said, should be accounted in the cost of cash. This means that far from being free at ATMs, cash in Sweden should be expensive. He is, of course, completely correct.
A clear case for contactless, you might think. And this reminded me of an experiment I conducted a few weeks ago in a bar! I was trying to show that paying by contactless and paying by cash take comparable time, so off I went…
Damn that Joe DiVanna!!
Anyway, I think that my point was just about made: using EMV contactless for low value transactions works for the tough case of the bar. The problem is that the POS hasn’t been configured to take advantage of contactless: I don’t think it would be that difficult to put a couple of contactless readers on the bar itself but leave the POS back behind the bar, so that customers could tap their cards on the reader without having the POS brought over to them.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]