Co-op banks on contactless payments with rollout for food stores

Queue-cutting on the retailer's agenda...

The Co-operative Group is to roll out contactless payments to its food stores starting from next year, offering the owners of the more than nine million contactless cards in the UK another way to pay for their shopping.

Contactless payments utilise NFC technology to enable shoppers to make a low-value purchase using their card without having to enter a PIN or sign for the transaction. Instead, the shopper swipes their card over a reader incorporated into the till system to make a payment.

By cutting out the need for shoppers to find change or enter their PIN numbers, the technology can speed up transaction times and so cut queues at tills.

The Co-operative Group is the first major food retailer to roll out contactless payments, following in the footsteps of takeaway food chains such as Eat, Pret a Manger and Yo! Sushi.

The Co-op said it will kick off a trial of contactless technology in 100 food stores next year, where customers will be able to make contactless payments up to the value of £15. If the pilot is successful, the tech will then be rolled out to its food stores nationwide, with the majority of stores getting contactless terminals in time for the 2012 Olympics.

The Co-op is partnering with Barclaycard and Visa for the contactless tech trial, meaning shoppers will be able to pay with contactless-enabled credit and debit cards.

A contactless-enabled Barclaycard
(Photo credit: Barclaycard)

Barclaycard's contactless card range includes the Barclaycard Gold Credit Card, and Barclaycard OnePulse which also has Oyster card functionality for contactless travel via London's public transport network. In addition, Visa's payWave contactless tech has been incorporated into Barclays debit cards.

Since March last year any new or replacement debit cards issued by the bank have included contactless payment functionality. As a result, Barclays estimates its entire debit card estate will be contactless by the end of 2011.

According to Visa, at the start of this year more than six million contactless Visa cards had been issued in Europe - a figure it predicts will double by the end of the year.

Mark Hale, director of food IS at The Co-operative Group, said increasing the number of ways to pay and speeding up transaction times are the key reasons for offering contactless payments.

"Contactless payment has huge benefits for our customers. In essence, this innovative technology will mean increased customer choice and faster transaction speed, which will vastly improve the customer experience," he said in a statement.