The 10 Year Anniversary of Contactless Cards
Contactless technology is a hugely impressive piece of social technology.
Its impact will go far beyond the world of plastic cards; it really is the beginning of an era of mobile payments where consumers feel comfortable waving smart phones or wearable devices like watches or rings to initiate their payments. If current adoption rates continue, it is predicted that mobile contactless will reach 3 billion transactions in 2020, which is the same volume as card contactless in 2016.
It seems inevitable that a shift to contactless universal payments is now well established. If current adoption rates continue, mobile contactless will reach 3 billion transactions in 2020 (i.e. the same volume as card contactless in 2016 – an impressive catch up if this is sustained momentum.)
It is tempting to think that debates about consumer payment techniques and standards may now be ‘done and dusted.’ For all of our familiarity with contactless here in the UK, the transaction volumes for contactless usage are dwarfed when compared to the figures of (predominantly Chinese) mobile payments users who use optical bar code scanning techniques within schemes like Alipay and WeChat Pay.
A significant proportion of Chinese consumers travel abroad and – not unreasonably – expect retailers to be familiar with their preferred way to pay. This is why high-value merchants across Europe and the US are currently working hard to add Alipay and WeChat Pay to their Points of Sale.
Despite their impressive volumes, I still doubt this will de-rail the progress of contactless. For many of us in cards markets, we are not keen on changing our habits and having to learn yet another new payment method. Nevertheless, the impact that WeChat Pay will have on developing markets should not be ignored.