Silvan Frik, head of marketing and communications, SIX Payment Services
On the 30th June 2003 the Oyster card was launched by Transport for London, allowing travellers to tap-and-go around the city’s transport network. Since then around 60 million NFC cards have been issued and they account for 85 percent of transport payments in the capital. It is often said that TfL has played a vital role in the promotion of NFC payments in the UK: Late last year TfL introduced NFC bank card payment capability across the London bus network. By April 2013 Londoners had paid for more than 700,000 bus fares using their contactless bank cards.
But what impact, if any, has the introduction of Oyster cards had on British uptake of NFC payments generally?
The answer is that the mainstream use of Oyster cards in London is likely to have encouraged uptake of contactless payments – but surveys suggests this is mostly evident in and around London. Dubbed the “M25 effect,” business intelligence specialists, the Peach Report recently found that UK hospitality businesses, for example, experience a higher number of contactless payments the nearer they are to London. Only a third of the hospitality executives surveyed cited contactless as a key technology opportunity for the coming year – suggesting that beyond London, contactless is still not considered a mainstream payment method.
Yet it is clear that retailers across the UK have made a clear effort in the past twelve months to offer contactless payment options. Boots, Superdrug and Starbucks are just some of the retailers to roll out contactless payment terminals across the UK. What’s more the results show a gradual consumer appetite for the payment technology, with Pret A Manger announcing a 15 percent rise in contactless payment transactions in their outlets over the past year. It is our general experience at SIX that there is greater appetite for NFC payments in the UK than in the rest of continental Europe – and it would be a fair argument to link this to the popularity of the Oyster card.
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Naturally the next question is around how NFC payments will develop – and whether this is likely to mirror the successes of the Oyster card in London. TfL’s recent development of introducing contactless bank card payments on buses will certainly help – since December last year TfL have taken over £3.5 million in NFC card payments.
One thing is for certain – consumers need to be educated on NFC and be assured of the security of such payments. Recent news headlines around the Marks and Spencer contactless terminals and ‘accidental’ tap payments will not have helped allay such fears. Card schemes, banks and merchants need to work together on an education programme, dispelling the NFC myths – and shouting about the successes of the Oyster card seems a good place to start getting consumers on board.
