Page 21 - The UK Cards Association Annual Report 2012

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Contactless Card Payments
There has been a huge step forward for
contactless card payments over the past
couple of years with substantial increases in
the number of cards in issue and encouraging
growth in the number of outlets accepting
contactless payments.
As of September 2011 there were 20 million
contactless cards in issue in the UK accepted
at more than 73,000 outlets, an increase of
78% and 89% respectively compared to one
year previously.
There are now seven major card issuers issuing
contactless cards and more big name retailers
(such as McDonalds and Boots) deploying
terminals. In February 2010 the limit for a
single contactless card transaction without the
need to enter a PIN was increased from £10
to £15, and a further increase is expected this
year to bring new retail sectors into the rollout.
The UK Cards Association has played a key role
in facilitating discussion between the cards
industry and the retail community, notably with
Transport for London (TfL) on rolling out
contactless payments in transport environments.
It is expected that contactless technology will be
up and running on all 8,000 London buses in
time for the 2012 Olympic Games, with the
system being rolled out onto the Tube, DLR,
tram and London Overground network during
late 2012/2013. The Olympic park itself is
envisaged to be a contactless card payment
environment for the duration of the event.
Payments Going Mobile
As with the development of contactless, the
appetite for using mobile technology to make
payments is expected to increase exponentially
over the next few months and years. Following
successful concept trials in the UK and across
the world, we expect the mobile phone handset
to become the dominant medium through
which banking and payment services are
offered to consumers.
Of particular interest to UK card issuers has
been the development of contactless card
applications that can be added to handsets that
support near-field communications (NFC)
technology and which we predict will be the
next major technological advance in card
payments across the UK.
We are already seeing handsets that mirror
contactless cards, allowing the customer to
carry out low value transactions using their
phone instead of a card, and without a PIN.
Once the technology is proven we expect the
applications to be enabled for higher value
transactions requiring PIN entry or some other
form of authentication. Card issuers are likely to
partner with mobile network operators to
provide payment applications to their mutual
customers. In time the mobile phone could also
become a means for consumers to accept, as
well as make, payments securely.
The industry is currently working on
establishing the detail of how this will work
best for consumers and retailers. Concurrently,
we are seeing the development of smart mobile
phones and tablet PCs that will improve access
to web-based payment mechanisms ‘on the go’,
migrating payments from home PCs to mobile
Consumer internet card spending
Source: UK Plastic Cards 2011
Values £ billions