Last week (5 Feb) The UK Cards Association announced that spending on contactless cards almost trebled in 2014. According to the body’s statistics £2.32 bn was spent in 2014 through contactless payments, a rise of 255% year-on-year.
Richard Koch, head of policy at the UK Cards Association told Marketing Week that this is a ‘sure sign’ that contactless has now firmly stepped into the mainstream.
“The huge growth in contactless payments over the last year shows that consumers are voting with their wallets in the way they choose to pay. Instead of needing to carry a pocketful of coins or notes, consumers are instead opting for the convenience and security that contactless payments offer,” says Koch.
Payment is now being used by a range of audiences and age groups. On Monday (9 Feb) Barclaycard released research which showed that the average user of contactless cards is 43 years old. Various cities in the UK have picked up the habit with Bristol, Manchester, Leeds and London all showing a sharp growth in contactless payments, according to the research.
While speaking to Marketing Week last week (5 Feb) Penny Smith, the head of regional marketing communications for the UK and Ireland said: “Until recently, there was an assumption that paying by contactless was something primarily done by younger card users. In reality, people of all ages are using contactless.”
Thousands of retailers have now adopted the service including Starbucks, McDonalds, Costa and Boots. According to the UK Cards Association, 10 contactless transactions now take place every second.
The speed and ease of the process has allowed brands to create better service for their customers with fewer abandoned transactions, as contactless payments increase.
Mark Fabes, IT Director at McDonald’s UK, told Marketing Week: “At McDonald’s we are all about serving good food, fast, so anything we can do to simplify the customer experience and reduce transaction time is worth considering.”
“On average, it takes 6 to 7 seconds to process a cash transaction. This is reduced to 1 to 2 seconds for contactless. The difference of 5-6 seconds might not sound a lot but, as we serve more than three million customers, this makes a massive difference both in reducing queues and increasing customer satisfaction,” adds Fabes.
The biggest winners have been the payment services, as the uptake drives brand loyalty to those providing varied payment options.
Katherine Whitton, chief marketing officer for Barclaycard told Marketing Week that the brand has been involved in various projects to grow its services.
In 2012, Barclaycard launched PayTag, a sticker that can turn mobile phones’ into devices with contactless payment abilities. In September 2014 the brand had introduced contactless payments to the Transport for London network. More recently, the brand also trialled contactless payment gloves.
“When we launch new ways to pay through contactless, we’ve seen the highest levels of brand consideration, demonstrating the interest from consumers and attractiveness of our contactless innovations,” added Whitton.
Barclaycard will launch new initiatives later this year, which focus on payments using wearable technology.
Koch told Marketing Week: “It’s a fast and easy way to pay and contactless means consumers are in control because the card never has to leave their hand when paying. We find that once a customer has used contactless for the first time, they quickly go on to use it elsewhere.”