Contactless: A new way of paying

Is the future of money changing? Get ready for contactless, a brand new way of paying...

We think nothing about paying for things with debit and credit cards now, and even using a pin rather than signing for purchases has become second nature, but have you ever bought anything using contactless technology?

This is a new payment system that’s currently being rolled out across the country. Barclays and Barclaycard are leading the way – around 6 million customers now have contactless cards. But Halifax, HSBC, and Royal Bank of Scotland / NatWest have also started trialling contactless cards with some customers.

Don’t worry if you’re not familiar with contactless, you’re certainly not alone, but somebody who’s very familiar with it is Dan Salmons, who is Director of Global Innovations at Barclaycard.

Q1: So Dan, can you just explain what contactless is and how it works?

Dan Salmons: Yes, a contactless card is a new kind of plastic card, which allows you to pay for items simply by tapping the card on a reader. The advantage of this is that it’s very quick and convenient for customers because it doesn’t need chip and PIN, which is ideal for lower value transactions under £15.

Q2: So the cashless society isn’t far away?

DS: It’s not far away – whether we’ll ever truly be cashless I don’t know, but I can imagine we’ll be using a lot less of it in the future.

CF: So it’s really simple to use, but because I wasn’t asked for my PIN, just how safe is it?

DS: It’s very safe indeed - security is absolutely paramount with any kind of payment innovation. There are three layers of security. The first is the data continues to be held on the same encrypted chip that we’ve always used on chip and PIN cards, and that’s highly secure.

The second is that we’ve set it up so that you can only make a number of contactless transactions before it will ask you for your chip and PIN. Now most customers will do some chip and PIN and some contactless, so they’ll never notice that, but if someone were to take your card, they could only spend a very limited amount before it was stopped and they were asked for a PIN.

Any then finally of course, as with all Barclaycards, it’s a 100% insured against fraud, so if it was stolen you’d simply tell us the card was missing and we would cover that, not you as a customer.

Q3: So how do you know if you have got a contactless card?

Dan Salmons: Well, you will get a new credit card through the post, from your normal bank, and it will contain this symbol - a little ripple symbol – and that tells you it can be use on a terminal at a retailer that has that symbol on it.

Q4: And do all retailers accept them?

DS: Not today, but they are rolling out very fast! So today there will be quite a few sandwich and coffee shops, places like EAT, Caffé Nero, Pret A Manger, they have rolled out across their chains, and places like Book Etc, National Trust and many, many small retailers. So, it is coming as it rolls out across the country.

Q5: So is there going to be any need for cash once contactless is widely accepted?

DS: I think what we will find is that because contactless is so much quicker and easier then fiddling with dirty, old cash, I think what we will find is that it is increasingly replaced.

I should think we should all carry a little bit of cash but we will find that we are only going to the cash machine once a month, or maybe even once a year in the future, because all our small payments are done using contactless payment.

Q6: I was going to say that, because obviously, it doesn’t have to be a card, its just that we are used to plastic with debit and credit cards. So where next, you are, sort of, Director of Global Innovations. How are we going to be paying for things in 10 or 15 years time?

DS: Well, where all this is going is certainly off the plastic completely. The wonderful thing about contactless is, you no longer need a plastic card, shaped like the traditional card, to make a payment. Contactless means you just tap it, and if you can tap a card, you can tap a mobile phone, and we are already working on mobile phone payments and over the next few years that will really be the device that you use for paying for things. And the plastic card? Perhaps just something you keep around in case you have got holiday.

CF: Dan, thanks very much.               


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