UK banking group Barclays has made no secret
about the fact that it wants to lead the contactless payment
revolution in the UK. Its Barclaycard unit has already committed
itself to a contactless future (see CI 408), and was the
first to introduce contactless technology on credit cards in the UK
in September 2007 with the launch of Barclaycard OnePulse, the
three-in-one Oyster, credit and contactless card.
Now, Barclays, one of the UK’s largest
current account providers with 11.5 million customers as of August
2008, is ramping up its efforts to push contactless even further
into UK consumer consciousness by announcing that it will be the
first bank in the UK to roll out contactless functionality on its
Visa-branded debit cards.
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From March 2009, most new debit cards
issued and cards reissued due to expiry will have contactless
functionality included as a standard compulsory feature. Barclays
said that more than 3 million customers should be using
contactless-enabled cards by the end of the year.
With a contactless transaction limit of
£10 ($14.84), payments will be debited directly from customers’
current accounts, although Barclays said that periodically cards
will prompt for PINs to be entered to verify the customer’s
identity.
Mark Parsons, managing director of current
accounts for Barclays, said: “We were the first to launch the debit
card in 1987 and now we are the first to give our customers the
latest incarnation – the contactless debit card.
“We are extremely confident that it is
going to be really popular with customers.”
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By GlobalDataContactless a standard
feature
Barclays is adopting the same tactic as
Barclaycard did when it acquired the Goldfish/Morgan Stanley credit
card brands in 2007, and added contactless functionality as a
compulsory feature into the new versions of those cards in late
2008.
At the time, Barclaycard stated that
credit card customers would not have the option of requesting
non-contactless versions of the cards, stating that customers could
simply choose not to use the contactless feature and use chip and
PIN payment instead.
But with contactless now being added to
its debit portfolio, Barclays is likely to face more resistance
from fraud-conscious current account customers who mistrust
contactless technology, given that payments will be taken directly
from their bank accounts, despite Barclays stressing that the risk
of fraud is miniscule due to technological safeguards already in
place.
There are also other logistical issues
that could arise, such as a rise in costs in administrative and
customer service processes. Also, most contactless terminals that
have been rolled out already are predominantly in the London
region, and cardholders outside the area may find a paucity of
locations where they would be able to use contactless.
Over 8,000 UK retailers already accept
contactless payments including many outlets of Pret A Manger,
Coffee Republic, EAT, Books etc, Krispy Kreme, Threshers and
thousands of independent retailers. However, that figure is well
short of the 15,000 merchants that Barclaycard predicted would be
accepting contactless by the end of 2008.
