Cashless Payments Set to be 'Norm' by 2012
Smart card payments will be the norm by the 2012 Olympics, according to UK industry experts. With 20% of UK adults using only cash for payments, the potential for smartcards to be used on low-value transactions is high.
The number of cash and card transactions is likely to be equal by 2015, said Mark Bowman, chief consultant at the payments council. He added that this could be fully exploited in the smart card arena by focusing on existing heavy users of cash among young people, migrants and the unbanked.
However, stores are still reluctant to invest in card readers at a difficult time for retailers. But Gregor Rankin, marketing manager for Ingenico northern Europe, hosting the round table, said that as card payment terminals are replaced on a five-year cycle, it would be “remiss” for retailers not to consider cashless payment technology when making their upgrade.
The value of cash transactions has already declined in real terms, with a significant decline predicted for the next five to 10 years. But the development of the technology for secure and effective payments is being hampered by low adoption rates, and vice versa.
Oliver Steeley, head of business strategy at Mastercard UK and Ireland, said bringing in a common standard for the technology brings down the costs for everyone. “It is not cheap to implement and needs to make commercial sense.” There was also a question mark, he said, over whether the bank or the mobile operator owned the technology. Cards could either being ‘pay as you go’ or linked directly to bank accounts – which could bring security issues of its own.
He added that although retailers who had implemented the technology were happy with it, many had yet to reach a ‘tipping point’ where it was more cost-effective to move away from cash. For example, the cost to a firm of security vans would stay constant unless the volume transported was drastically reduced.