Contactless payments are up, but remain rarely used

Contactless payments are up, but remain rarely used

Summary: The amount spent using contactless payment technology in the UK is five times higher than one year ago, but the technology has yet to catch on in a big way.

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The amount spent using contactless payments in the UK has increased fivefold over the past year, but still accounts for a tiny fraction of overall payments, according to figures from Visa Europe.

Brits spent £45.2m and made 6.8 million purchases using Visa's contactless cards, which allow payments to be made by tapping the card onto a contactless reader, in June 2103 — five times the amount spent in the same month last year.

UK shoppers made 51 million contactless purchases over the past year, according to the figures, with the average spend via contactless being £6.65. However, contactless payments still only account for a fraction of the overall payments handled by Visa Europe, which can process around 50 million transactions on a single day during the run-up to Christmas.

There are currently more than 28 million Visa contactless cards and 280,000 contactless terminals in the UK. Visa Europe predicts there will be more than 33 million contactless cards in the UK by the end the year.

There are still relatively few outlets that accept contactless payments, but large retailers such as M&S, McDonalds, Pret A Manger, Boots, Co-op, WHSmith, Starbucks and Costcutter do accept the payments. Major banks such as Barclays, HSBC, Lloyds, Natwest and RBS issue contactless cards.

In May this year the UK retailer Marks and Spencer said it was handling more than 230,000 contactless transactions every week.

Across Europe €1.5 billion has been spent on 187 million purchases using Visa's contactless payment services.

Contactless mobile payments, which use the same underlying NFC technology (and are seen as the next step for contactless payments), remain at best nascent thanks to confusion over standards, business models and a lack of a compelling customer proposition — even though it's an area that mobile operators, handset manufacturers and credit card companies are eyeing with great interest.

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Topics: Mobility, Networking, Smartphones, Software

About

Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

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6 comments
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  • Shocking!

    After all, it's so much easier to use NFC than to scan a barcode on the phone. Isn't it?
    Larry Seltzer
    • actually larry.

      Forgive me if i am misunderstanding here, but if they mean credit cards that have a chip in them that works by bringing it close to the reader (like sub 1 inch) (and maybe using a phone with app also)

      I initially said the same thing--- till someone told me you don't need to remove the card from your wallet, just tap the wallet to the reader. remove wallet from pocket, tap reader, place wallet back in pocket, no standing there while you grab the correct card from the wallet, swipe it, and then have the cashier waiting to hand you the receipt while you're (well me at least) fiddling to get the card back in his slot in the wallet, before replacing the wallet in your pocket. Granted this whole process isn't long, 15 seconds maybe, but this tech cuts it to under 5 seconds most times......Its like a cell phone, nobody needed one until it was invented, now its terrible to be without.

      Cobra: Charge the wrong card ? How close was the other person standing?? the readers I usually use are at the Wawa convenience store, and they don't flash unless the wallet holding the card actually touches them, like its probably less than an inch of material between the card and the reader, I'd say its within half an inch before reading most times.
      dosmastr
  • Things are already pretty convenient.

    Things are already pretty convenient. It's not hard to swipe a magnetic strip.

    And there have been some issues with NFC charging the wrong card when somebody else's phone is nearby.
    CobraA1
  • Hardware

    The main barrier to use for me, reliability of the hardware. In the past 6 months, most of the places I was using contactless, all but one have returned to chip and pin while they "fix the other thing".
    It would appear that there is just as much apathy from the retailers as there is from the customers.
    Little Old Man
    • The banks aren't helping either

      My bank issues contactless cards, apparently.

      They won't issue me with one though. The branch staff say no problem but the new card arrives without contactless, then they say you can only have it on a credit not debit card, but the contactless credit card comes without it, then they say they don't know what contactless is....

      I've noticed the self service tills at my local Tesco now have 'contactless' as a payment option on the screen but it's greyed out. Maybe they will accept it soon? Maybe not.
      thistle-1236a
  • Only small amounts...

    For bills greater than 20, need chip/pin...but very convenient for small purchases
    anonymous