Contactless and the future of payments

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Our society has seen an incredible rate of technological change over the past few decades. Never before have people borne witness to such rapid change – not even during the famed Industrial Revolution.

This change has had a profound impact on every aspect of our daily

A mobile phone making a contactless payment
Visa contactless payments making headway in Europe

lives. From health, through education, all the way to recreation: no area of our lives has been untouched – writes Jon White, Senior Manager, Mobile Strategic Alliances at Visa Europe.

When you think of this technological change your mind probably doesn’t jump straight to payments, but this industry is absolutely keeping pace with developments elsewhere. Most people no longer use cheques and cash is quickly disappearing from people’s wallets too. Technology has provided us with cleaner, more hygienic ways to pay – ways that aren’t beloved of the global criminal underworld.

Change in the payments sector hasn’t finished with Chip & PIN, either. The industry is still keen to innovate and work every day to develop safer and easier ways to pay. One new payment technology that’s really taken off is the contactless card.

In July 2013, over 30 million contactless transactions were made across Europe, representing a total of €285 million spent. This is a massive increase on the €48.5 million spent across 6.8 million purchases in July 2012. There are now 69 million contactless cards in Europe and more than 1 million contactless terminals – both numbers that are growing all the time. This rapid growth has been helped in no small part by our Olympic Payment Showcase last year.

How is this relevant to the UK? Over 8.6 million contactless transactions were made in Britain in July by 29.8 million Visa cards at 288,009 terminals. This growth has been supported by some of the best-loved names on the high street. M&S, Boots and McDonalds are just three names in a long list of major merchants who’ve now gone contactless.

These merchants realise the benefits of contactless both to their customers and to their own businesses. Consumers are increasingly pressed for time and can’t always afford to wait in line when they need to buy something quickly and move on. Smart retailers work to make the purchasing process easier for customers so they don’t miss out on those who are too busy to buy.

Now that customers are comfortable with contactless, the next logical step is NFC payments through mobile devices. Mobile phones are the perfect gadgets for making payments. They only really took off at the turn of the century, yet now everywhere you go people are using them – not just for making calls, but to organise their entire lives. We just can’t live without them.

Much like mobiles and tablets are making laptops redundant, they’re set to make your purse redundant too. Payment and mobile banking apps loaded onto NFC capable smartphones are just one of the ways in which people will be able to pay quickly and easily using nothing more than the mobile phone they already use for everything else. At Visa Europe we’re so confident of the role mobiles will play in our future that we predict that half of all Visa transactions will be made through a mobile device by 2020.

NFC isn’t the only mobile payments revolution in the works, however. Digital wallets such as our upcoming V.me by Visa will deliver an enhanced shopping experience online. V.me by Visa will again be accessible through your mobile phone’s web browser, as well as on a tablet, laptop or a PC.

Provided by your bank, you’ll be able to store all of your cards in the wallet, ready to pay quickly and securely at online points of sale. There’s huge demand from retailers for a service as trusted and secure as ours and Dixons and Clarks have already signed up to accept V.me by Visa before its commercial launch.

You would be forgiven for thinking that this is all very well, but wondering what good this is if we still need cash to transfer money to our friends and family. Your mobile has that covered, too. With services like Visa Personal Payments people can use their phones to transfer money to an address book contact when lending money for a taxi or splitting a restaurant bill.

This is much easier than rooting around in your purse looking for the right change and has the same level of security and reliability that is expected from Visa products.

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