U.K. Consumers Want Higher Transaction Cap for Contactless Payment
In the U.S., a market where checks are still a crucial form of payment and plastic cards are prevalent as ever, it is hard to imagine using contactless payments for transactions like buying groceries or train tickets. But in other markets like Europe or Australia, consumers can’t get enough of contactless payments.
In fact, a report from Mastercard earlier this year showed that in 2017, contactless payments had increased 145% across Europe, and is expected to grow further this year.
Today, most consumers — particularly in the U.K. — use contactless payments more than cash. A report released today by GoCompare Money, a marketplace for payment and insurance firms, found that 90% of U.K. consumers surveyed said they have embraced contactless. In the U.K., 73% said they find it more convenient than other forms of payments, including cash. If that number is not higher, it could be because there is a strict limit of £30 ($38.39) per transaction made through contactless payment in the U.K. According to the GoCompare report, many consumers want that to change.
The survey found that among those using contactless payments, 42% want the limit per transaction to be raised to £50 ($63.81) or higher, while 9% would like to be able to make payments of £100 ($127.62) or more.
In the report, Georgie Frost, consumer advocate at GoCompare Money, stated:
Since the introduction of contactless cards in 2007, the speed and ease of their use has seen millions of us embrace the technology for day-to-day shopping.
The report found that the most popular area of spend for contactless payments is grocery shopping, followed by coffee, food, and transportation.
In the U.S., however, there is a long way to go before contactless payments reach this level of ubiquity. Right now, apart from coffee company Starbucks, most banks and card networks do not provide contactless payment capabilities. This is not because there is a lack of infrastructure. In fact, Bank Innovation previously reported that most merchant payment machines, which have been revamped to for the EMV chip a few years ago, already have the technical architecture to accept contactless payments.
Bank Innovation also reported that currently, in the U.S., cards (debit and credit) are the still the most popular method of payments for daily transactions. With EMV chips being the preferred way of payment followed by swipe, cash, and check.
But even when it comes to EMV chip-enabled cards, the U.S. is behind most of the markets, including Europe and Asia. But with wearables like Garmin, Apple, P2P apps and digital cards as well as initiatives like PayPal’s smart checkout, contactless payments might be making way to the spotlight in the U.S.
