Contactless #pass and #fail

[Dave Birch] Having been focussed on some other initiatives for a while, I hadn’t been paying much attention to the contactless roll-out in the UK. However, in the last couple of days I’ve had a couple of interesting experiences. First, I popped into Pret a Manger near Euston to get a latte while I was waiting for a customer. I noticed that they had contactless readers, correctly positioned and apparently turned on. So I paid using my splendid Barclaycard OnePulse card.

That’s the story, basically. A contactless terminal, in a useful location, properly installed and working without a glitch. I paid in a couple of hundred milliseconds and left.

Not everything in the garden is rosy though. Yesterday at Cafe Nero I noticed another contactless terminal, once again correctly positioned and turned on. So I tried to pay using my splendid BarclayCard Cashback card but got the message “not authorised”. Ever vigilant to explore the contactless envelope on behalf of digital money denizens, I tried a couple of other devices about my person (a sticker on the back of an iPhone and a mobile phone) and the terminal read them correctly, so there was no doubt that it was working. I tried my BarclayCard again. “Not authorized”.

I was really surprised by what happened next though. The chap at the till explained to me that contactless cards could only be used a few times before they must be used in a regular chip and PIN terminal (“to make sure that it is really your card”) and invited me to use the contact interface. Incidentally, he also told me that more and more people were using the contactless terminal. That’s a good sign, and it’s from the horse’s mouth, so to speak. I knew the offline no CVM count wasn’t the problem (you get a different message on the terminal) but did it anyway and, of course, the transaction worked perfectly. So having done the chip and PIN transaction, I then bought a cookie (any excuse) and tried to use the card contactlessly again. “Not authorized”. Barclays #fail.

The point of this anecdote it not that one of my cards didn’t work properly but that the retailer had clearly trained the staff properly and they understood how the product worked, which I think is evidence of progress that deserves reporting.

The research conclusions identified merchant acceptance as a critical factor in promoting consumer use of contactless payment technology.

[From Alliance Activities : Publications : Issuer and Merchant Best Practices: Promoting Contactless Payments Usage and Acceptance – Smart Card Alliance]

This is undoubtedly correct, but it’s not just the terminal penetration that is the measure. It’s whether the merchants have trained their staff to exploit contactless properly so that people will be encouraged to give it a try and, when things don’t work properly on occasion, help them sort out what’s going on. Well done Cafe Nero.

Actually, the global projections for the growth of contactless transactions continue to be bullish so there’s no doubt in my mind that contactless interfaces will contain to gain market share: in the long run, contactless is cheaper and simpler than contact.

Yankee Group predicts worldwide contactless card transactions will come in at 3.5 billion this year, 7.9 billion in 2010, 15 billion in 2011, 23.6 billion in 2012, and 31.8 billion in 2013.

[From News]

There is one thing, though, that my recent positive contactless experiences have made me think about. When I paid in a couple of hundred milliseconds at the Coffee Bean in Singapore or Pret in London, I still had to wait while the POS printed out a paper receipt that I didn’t want. They could have just e-mailed it to me, maybe. But sometimes I do want the receipt because I need it for filling out my expenses form at the end of the month. If I’m paying, I don’t care about the receipt being on paper. But if the company if the company is paying, then they need bits of paper.

I wonder if there’s an opportunity for the acquirers to get together and create “Expenses Vault” or something similar, so that when I fill in my timesheet at the end of the month I can just put down a reference number instead of including a paper receipt. Then our accounts department can randomly select a couple to check now and then (just like when you use self-checkout in the supermarket) and the auditors can do the same at the end of the year: log in using their “auditor identity” or whatever and then feed in a bunch of references and get back the details. It’s not hard to work out the statistics to see that a relatively small number of checks would be needed to make the whole system work.

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