Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

This year the contactless ‘wave and pay’ revolution finally begins

With London 2012 set to be the first contactless Games – retailers and banks are finally embracing the technology

Forget the year of the dragon – 2012 is set to be the year that contactless payments really take off in the UK … if those behind the technology are to be believed.

Until now, it’s fair to say the contactless revolution, allowing people to pay for less costly items without having to key in a pin, hasn’t grabbed British shoppers. A mistrust of the technology in some quarters and a lack of interest among some banks haven’t helped.

However, with London 2012 set to be the first contactless Olympic Games, Mark Austin, Visa Europe’s head of contactless, is predicting this will be the year it all takes off. He likens it to the boom in internet shopping that came from a slow start. Once we use our cards “contactlessly,” he predicts, we won’t want to stop.

UK contactless shoppers are allowed to make pin-free purchases for up to £15. Those making several such payments are required to enter their pin once they reach an undisclosed limit.

Austin says every sales terminal at the Olympic venues will allow “wave and pay” purchases. McDonald’s, which is building what it says will be its largest restaurant in the world on the Stratford site, will also be contactless.

And it’s not just the site itself. Transport for London says users of London’s 8,000 buses will be able to hop on and pay direct using their bank card in time for the start of the Games, with the system being rolled out to the tube, Docklands Light Railway and overground network before the end of 2012. More than 2,000 London cabs will be offering the payments, too.

Away from the Olympics, Greggs the bakers is going contactless at its 1,500 shops. The Co-op’s supermarket chain is introducing the system at all stores within the M25, while Wilkinson, Subway and Superdrug are introducing new tills. They join early-adopter firms such as Boots, Eat and Pret A Manger, and the company that is driving its takeup at the moment – McDonald’s.

Retailers like contactless because it shortens queues at busy times and lowers cash handling costs. One of the problems has been a lack of interest from certain banks. While Barclays/Barclaycard has been the undisputed leader – almost all its credit and debit cards are now contactless – others have been less keen.

HSBC is yet to issue a contactless card but says it is looking at the area. Britain’s biggest building society, Nationwide, is “actively” looking at the technology but it looks as though its customers will be inputting their pins until 2013 at the earliest.

Royal Bank of Scotland, which includes NatWest, has some contactless debit and credit cards in issue and is looking to increase this in 2012, with the initial focus being on debit cards within London and the south-east.

Lloyds, a major financial Olympic sponsor, says it has 1.5m contactless cards in use (including those held by Halifax customers), which will rise to 2m by the summer. They are mostly going to those living in urban areas, but any customer can ask for one if they wish.

Meanwhile, mobile handset contactless payments are still on the way. Last year, Guardian Money reported on the first mobile payment trial in the Spanish town of Sitges, near Barcelona. Residents were given Samsung phones fitted with special sim cards and embedded bank cards to allow them to make contactless payments at local businesses. The trial was so popular that it is just a question of when it will get rolled out to a wider audience. A lack of mobile handsets with “near field communication” technology is holding things up. However, last week, Visa announced that the latest smartphones from Samsung, LG and BlackBerry have been added to the list of Visa-compliant payment products “available for commercial deployment by financial institutions”.

Once the banks start offering cards embedded in handsets, users will be able to use them to make purchases using the same contactless payment terminals being unveiled in Barcelona and here in the UK. Watch this space. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds