Blog: Dean BestHow will we pay for goods this decade?

Dean Best | 29 June 2012

Cheques are being phased out, few of us have pockets full of notes and coins and many see chip-and-pin as a way of life. But what does the future look like when thinking about how we will pay for the goods in our shopping basket?

Nipping to my local convenience store (it's a Co-op outlet if you must know) and paying for lunch with a debit card using the Visa payWave system of contactless payment has become an almost daily routine.

It's quick and easy and (so far) secure. The bods at Visa say there are around 20m contactless cards in the UK, which is growing at a rate of 28% a year. It estimates that by the end of 2012 there will be 30m contactless Visa cards in the country.

There has been some scepticism around whether contactless cards would become popular. Two years ago, when The Co-op decided to install the technology in its stores, some rivals said they wouldn't follow suit, saying investment in improving speed at tills meant customers could process transactions quickly anyway.

However, it seems the payment method has gained traction, with the likes of McDonald's and Pret a Manger using the system.

Interestingly, Asda could soon be next to introduce contactless payment. At a conference this week held by the British Retail Consortium, Visa Europe chief commercial officer Steve Perry said Asda would soon offer the system.

Nevertheless, companies like Visa are eyeing the next trend. By 2020, Visa's Europe division predicts 50% of the transactions that cross its network will be via a mobile device.

A report issued in France this week predicted that mobile payment will "take off" within the next three years in the country.

A study by consumer analysts CCM Benchmark and financial service consultants CSA Consulting said m-commerce sales were expected to cross the "symbolic threshold" of EUR1bn in 2012.

However, they said mobile has the potential to become "the most natural interface between retailers and consumers". The firms pinpointed 2015 as "a pivotal year" for the payment method. By then, they argued, NFC technology should become "a technological standard" for payment by mobile. NFC is the technology that allows consumers to use contactless cards to pay for goods by holding your contactless device over a wireless reader in a shop without the need to enter a PIN. The card or phone works using a secure radio signal between the contactless terminal and an antenna found in the contactless device.

Visa's estimate and the French study suggests the way we pay for goods will change rapidly as we move through this decade.


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