[Dave Birch] There are different groups vying for the “low value” payment market at retail POS. Hence there’s the potential for some real innovation. But what is the “low value” market? I was in a meeting recently where the discussion took an interesting turn. One group of retailers were unhappy with the UKP10 limit (fifteen euros on the continent) for contactless payments in London and the suggestion popped up — which I thought was reasonable — that the low value cut-off might well vary between retailers or categories. But it might also depend on the channel. In the mobile world, the Payforit scheme has a UKP5 maximum purchase value but some operators are already saying that this should be raised to UKP10 (as I’m sure it will be soon) because the fiver limit doesn’t cover a broad enough range of content. We don’t want to end up with a confusing landscape for consumers though: it would, surely, be more sensible to have a universal definition of low-value payment across all channels and categories so that both customers and shopkeepers knew exactly where they stood: if the payment is under X then there’s one set of rules and rights, above X then there’s another set of rules and rights (eg, Consumer Credit Act-style rights). This would also simplify implementation and customer education at the same time.

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Incidentally, talking about low-value payments, I saw that pioneer e-purse Chipknip is steadily vanishing from the Dutch retail landscape. It’s now been removed from attended POS and is being replaced by debit cards. Retailers didn’t warm to it after a decade and customers didn’t like having to find places to load it and they never knew what their balance was anyway (life will be so different when we all use phones instead of cards). But it did find a predictable niche in unattended environments: parking, vending and catering. that sort of thing and the product has a stay of execution because of that. I expect it will gracefully hand over to mobile promixity payments in a couple of years’ time and then retire completely.

Anyway, the reason I remembered that Linkdump piece was because of this comment:

We should also not forget the headlines of 10 years ago. Merchant lobby groups at that point of time explicitly stated that they were going to boycot the use of the Chipknip in the stores. Well, they lived up to their promise. It would be interesting to know if Neelie Kroes or any of her staff at DG Competition would also consider such collectively enacted boycots an abuse of dominant market position ?

What an interesting line of enquiry! Perhaps the Commission, instead of constantly blaming banks for the lack of competition in retail payments, slow progress toward SEPA and high merchant service charges, should cast the net more widely: why should merchants be excused from investing in the future of payments if the Commission believes that new payment schemes are important for European consumers?

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

1 comment

  1. Chortle! That would be a fine EC decision: solve “anti-competitive” behaviour by instructing a single monopolised solution!
    In more or less seriousness, the definition of low value payments is fundamentally a battle between the costs of the payment media and the needs of the users. IMHO, trying to draw a line is futile because needs and technologies (read: cost of payments to users) change all the time.

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