• Lu Zurawski, Practice Lead Retail Banking and Consumer Payments at ACI Worldwide


• 19.06.2018 06:30 am
undisclosed

11 years after contactless payments were introduced in the UK, almost two thirds of Brits are now using them, according to UK Finance, with contactless payments increasing by 97% in 2017 to 5.6 billion.

While these numbers sound impressive, the impact of contactless will go way beyond plastic cards.  Contactless technology is a hugely impressive piece of social technology. It has helped to usher us into a completely new era of mobile payments, where consumers feel comfortable to not only wave cards but also smart phones and wearable devices like watches or rings over a card reader or device to initiate their payment.

It is tempting to think that debates about consumer payment techniques and standards may now be ‘done and dusted.’ But, perhaps controversially, I think the future for contactless may be a bit more ‘touch and go.’ Now that consumers are happy to wave a phone and not a card, will it be that hard to add new, non-card instruments into those mobile wallets? How about bank accounts - newly secured, authorised and authenticated using the techniques that European public policy initiatives like the Payment Services Directive (PSD2) are nudging markets into adopting.

Looking beyond the UK, transaction volumes for contactless usage are surprisingly dwarfed when compared to the figures of (predominantly Chinese) mobile payments users who use alternatives to contactless, specifically optical bar code scanning techniques, within schemes like Alipay and WeChat Pay.

After a recent trip to China, I had to concede that more than 600 million regular users cannot all be wrong. More importantly, a significant proportion of this user base travels abroad and – not unreasonably – expects retailers to be familiar with their preferred way to pay. Which is why retailers across Europe and the US are currently working hard to add Alipay and WeChat Pay to the accepted payment methods at the check-out tills. It would be foolish to ignore the impact that schemes like WeChat Pay will have on developing markets where consumers have previously never held a bank account, never mind a contactless plastic card.