BankTech

Five Times Brits Went Overboard to Promote Contactless Payments

MEDICI

You can buy goods worth £30 in UK by simply waving your card, wristband, phone or any other contactless device at the POS terminal in a shop. Companies in UK have started promoting contactless payments, but there are cases where retailers have started charging customers more to use a chip-and-PIN card.

Subway charging an extra 10p to use chip-and-PIN in Brislington, Bristol

Recently at Subway in Brislington, Bristol, a Subway customer was asked to pay 10p more for using a debit card that is not contactless. The concept of contactless payments is new and so there is an initial jitter among users.

There are cards among users where the contactless feature is not yet enabled or will not be enabled in the next few years. Does that mean that chip-and-PIN card users will have to pay an extra amount whenever they want to make a purchase?

How the UK Card Association is forcing contactless payments

- The UK Cards Association has already mentioned that contactless payment points could be compulsory in every UK shop within the next five years

- Every British retailer will have to offer the tap-and-go system

- Shops are charged much less for “tap-and-go” cards than regular bank cards

Role of Visa and MasterCard

Under new rules introduced by Visa and MasterCard, shopkeepers will be forced to provide a contactless payment method by 2020.

MasterCard started boosting Apple Pay adoption with free TfL Travel

In November, MasterCard announced that MasterCard card holders using Apple Pay will be able to ride Transport for London (TfL) for free for several upcoming Mondays. The “Fare-Free Mondays” campaign allowed passengers to touch in and out of the transport network with their Apple devices and receive up to £27.90 in refunds from MasterCard for their journeys on the Underground, buses, DLR, trams and National Rail services in the capital. The promotion ran each Monday until December 14. MasterCard thought it to be a phenomenal catalyst for the growth in contactless payments across the UK.

Barclays allowed its customers to upgrade the size of their Starbucks coffee for free if they used contactless payments

Barclays’ customers were allowed to upgrade the size of their Starbucks coffee for free at participating locations in the UK if they used contactless cards issued by the bank. The offer ended in June 2015.

Although we feel that Brits went overboard to promote contactless payments, it will have a far-flung benefit to the society. Forcing contactless payments might cause an initial jitter among users but it will help in creating a truly cashless society.

Retailers and corner shops often have a £5-minimum-spend policy on debit and credit card transactions to cover the charges imposed by banks for processing the payments. Contactless payments mean that retailers will be charged significantly less for transactions involving touch-and-go cards. Contactless payments will prompt many shopkeepers to get rid of the minimum charge requirement which will be a significant boost for a cashless society.

MEDICI Team

MEDICI

MEDICI Team is a group of content writers, bloggers, journalists, researchers, and editors from the MEDICI team who collaborate to create FinTech insights.

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