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Are banks embracing contactless technology?

Starbucks are the latest of the big high street retailers to embrace the use of contactless technology as a method of payment. They join a list of names which includes M&S (who this week have revealed that they are processing over 230,000 contactless payments every week)  Tesco, Boots and Ikea.

The coffee chain have fully embraced contactless payments and will be rolling it out across their 570 UK stores by the end of 2013. Starbucks’ VP of marketing in the UK has said that the option for customers to use contactless offers them “the quickest and most convenient way to pay – which is not only great news for them but also for other customers in the queue.

Contactless payments have long been heralded as the next big thing in banking as it allows customers to pay for low value items (usually under a value of £20) without the need for keying in a PIN number, instead waving their card over the reader positioned at the till.

Despite this, UK banks have been slow to embrace wide use of this technology and have issued contactless cards to a relatively small number of customers. It is Barclays who have led the way with this, after introducing the first of these cards in the UK in 2007, they have since issued 20 million of the 31 million contactless cards in the UK, either via Barclays Bank or Barclaycard.

So what exactly is stopping the big high street banks from living up to the hype? Gocompare.com have conducted research into the scope of contactless payment in the UK and has found that only 6% of people surveyed have ever made a contactless payment. The research seems to suggest that people simply aren’t engaging with the idea of it, with 1 in 4 of the 2,000 participants in the survey saying that they simply found the idea “scary”.

Are the big high street banks doing anything to dispel the fears of customers? After all you can only pay in this manner if your bank has issued you with a card capable of it, so how do the banks measure up against the high street retailers.

Barclays

Since Barclays are leading the way with contactless payments, it’s only fair that we mention them first here. They have issued over 19 million debit and credit cards allowing you to wave-and-go and have also introduced PayTag, a mini-card which you can attach to your mobile phone, making this an additional contactless payment device.

RBS 

RBS appear to have committed to contactless technology as, from now on, all new accounts will receive a contactless card. This will also apply to any customers who need replacements for lost or stolen cards, or customers whose cards are due to be renewed.

Lloyds TSB 

With 22 million customers across Lloyds TSB, Halifax and Bank of Scotland, Lloyds remain one of the slowest to roll out contactless payments across  their customer base, issuing only 1.5 million contactless cards to Lloyds TSB customers. They also have no immediate plans to automatically replace existing cards, instead allowing customers to request one if they so choose.

HSBC

HSBC are working through a 3 year rollout of contactless cards to its 8 million strong customer base. HSBC began replacing existing cards in May 2012 and estimate that they will complete the rollout in April 2015, however in the meantime any customers who would like a contactless card can contact the bank and request one.

 


Are banks embracing contactless technology?

Starbucks are the latest of the big high street retailers to embrace the use of...
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