It was 2007 when Barclaycard launched the first contactless card in the UK. With a maximum spend of £15 and accepted by very few retailers, contactless cards were seen as little more than a gimmick and consumers were sceptical of their security. Sensational headlines about how easy they were to skim and hack did nothing to calm these fears.
Embraced by fast food chains, sandwich shops and coffee shops as a way to beat queues and serve customers quickly, slowly the technology began to expand.
Security concerns were addressed head on: banks and issuers assured card holders that the cards are safe, pointing out that added security, occasionally the consumer will be asked to enter their PIN number.
The spending limit on the card was increased further to £20 and then to the £30 limit we see today.
However, the technology still didn’t expand at the pace the industry expected. Getting supermarkets to adopt it was seen as being key. Yet supermarkets had their own queue-busting technology in the shape of self-service tills. And with the average British family spending £58 per week on food, a £30 limit represents just over half of this. Supermarkets encourage consumers to buy more, not less.
So why, then, has there been a story this week stating that one-in-five card payments have been made via contactless?
That can be explained with three letters: TfL. In late 2012, Transport for London launched the use of contactless bank cards to pay for bus journeys in London. Given that the Oyster card used the same NFC technology as contactless cards, it was a logical step.
The trial was so successful that two years ago this week, TfL expanded this to cover all journeys in London by train, tube, DLR. With one third of all Oyster card holders now moving to contactless bank cards, this has been the prime mover in the recent growth of contactless payments.
What contactless needed was the right platform. When it found its niche in the transport sector, it flourished and has truly taken off. So what is next for the contactless world; will the limit be increased to gain wider acceptance, and if this happens will the biggest challenge be concerns over security? Being able to use your cardholder PIN conveniently without the need to revert to entering your card in to a POS terminal, such as is possible with MYPINPAD, could be the solution.