Shrinking sweet spot

[Dave Birch] As you may know, the banks have launched contactless cards in the U.K., aiming for a cash replacement “sweet spot” in the range UKP2.50 to UKP10 pounds, where the speed and convenience should work well. So I was thinking of suggesting to the pub over the road from our office that they install a contactless terminal, thus ensuring a steady stream of traffic from Consult Hyperion as we conduct visitors from around the world in their direction for a contactless lunch. But oh dear..

I’m genuinely beginning to worry.

Meanwhile, a I ran into a shop in Woking to grab a couple of things. A drink, a magazine, a box of chocolotates for the kids to share with their friends after dinner. It came to nearly UKP5, but I only had UKP2 in cash, so I took out a card. The shopkeeper told me that it would be an additional 75p (ie, a transaction fee of about 12 per cent) to use the card. So I put the chocolates back and just bought the magazine and drink.

I really don’t understand the dynamic. The shopkeeper gave up a margin about 50 per cent (let’s say UKP1.50), or double what he was proposing to charge me for the card payment. Neither the acquirer nor the issuer made anything. I didn’t get the chocolates (I got the kids some ice cream instead). Something is going horribly wrong in the world of cards, interchange, contactless and acquiring..

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