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  1. Analysis
August 3, 2010

Comment: Barclaycard needs a running mate

Barclaycard registered an important victory in its quest to turn Britain contactless this month, signing up the Co-operative as the first supermarket in the country to install terminals. The plan is to trial the contactless near-field communication terminals (NFC) at The Co-ops pharmacy branches before rolling out the technology to the groups supermarket network in 2011

By Verdict Staff

Barclaycard registered an important victory in its quest to turn Britain contactless this month, signing up the Co-operative as the first supermarket in the country to install terminals.

The plan is to trial the contactless near-field communication terminals (NFC) at The Co-op’s pharmacy branches before rolling out the technology to the group’s supermarket network in 2011. Barclaycard has also signed up Little Chef, a restaurant (see Are we at the contactless tipping point? and Retailer fee complaints ‘pointless’  for an analysis of recent contactless developments).

Although the signing of The Co-op was a notable one for Barclaycard, there remain a number of challenges if the UK is to embrace contactless. The Co-op is not one of the big three UK supermarkets and its store network has a limited presence in London, where the high concentration of people is most likely to promote uptake of contactless payments. The technology is also not set to be in operation until early 2011, meaning other retailers will not see the system in action for at least six months. Barclaycard, through its strength in the UK credit cards market, has been able to push contactless as far as it has by compulsorily switching over its credit card customers to contactless. It now has around 8m of the products in the market, a group of consumers big enough to gain traction in the market.

However, even senior people at the bank acknowledge it cannot change the UK market by itself. Other banks in the country need to join the push if the technology is ever to take off fully.

Lloyds Banking Group, which is the official bank partner of the London Olympics in 2012, looks best positioned to do this, with Visa, another sponsor, pushing for a contactless Olympics. However, Lloyds has just 650,000 contactless cards in circulation and its plans for the Olympics remain in the planning stages. Clearly, if these ambitious Olympic goals are to be realised, Barclaycard needs a running mate.

 

 

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