Paid with a wave: latest card up Visa's sleeve

Using your pin will soon be a thing of the past for small transactions, with Visa set to roll out contactless payments in Ireland, after successful trials at last year's London Olympics. A phone payment app (above) is also in the pipeline

Using your pin will soon be a thing of the past for small transactions, with Visa set to roll out contactless payments in Ireland, after successful trials at last year's London Olympics. A phone payment app (above) is also in the pipeline


At last summer’s Olympics, all the bars, restaurants and shops across the sprawling east London complex hosting the games were fitted with specially adapted terminals that allowed punters to make relatively small purchases with their flexible (and plastic) friends without having to key in a pin or sign a stub.

The aim of the new system was to help people spend money faster, but there were few takers as most people at the games insisted on using cash or credit cards that lacked the latest technology. Those who did casually wave their Visa debit card over the terminals were frequently met with bemused looks from the till operators, who were sometimes clueless about the contactless technology that was being trialled.

What was a novelty last year will become part of everyday life in 2013. You may not have made your first contactless transactions yet but it is only a matter of time. Retailers and restaurants – including, most recently, Marks Spencer and McDonald’s – are rolling them out across their outlets in the Republic. They can also be used in Arnotts, Boots, Insomnia, Centra, Spar, EuroSpar and Mace.

The idea is pleasingly simple. Your purchases are rung up as normal at the till but instead of swiping a card or putting it into a terminal and keying in your four-digit number, you just wave the plastic in the general direction of the machine and as long as you haven’t spent more than €15 you will be on your way. If you go over that limit, you will be asked for your pin number as normal.

But if you don’t need a pin number, what happens if you lose your card? Could you be exposed to serious fraud? The short answer is no. For a start, you are limited to this €15 ceiling in a single transaction, and the total value of consecutive contactless transactions is limited. If you spend a maximum of €45 across any number of retail outlets you will automatically be asked for your pin to prove that your card is actually yours. So the very most you could lose if you lose your card and it is found by a ne’er-do-well is that ceiling of €45.

When Visa was showcasing its new system in London last summer its executives were unsurprisingly gushing. It was, they said, all about making life easier for consumers. The truth is, it is all about making money for Visa.

Contactless technology

The one-time credit-card company is spreading its wings and has moved in to the debit-card space in a big way. It is also pushing forward with plans to convert our mobile phones into mobile spending machines, and wants to make our online spending easier by introducing a one-click system for all internet-based transactions.

The company is banking on contactless-card technology and it has the support of the State’s major banks, which have all issued its debit cards to replace the Laser card that served us so well.

When it comes to contactless transactions, Visa has been first out of the blocks and is already reaping the rewards. Figures released last month showed annual Irish consumer spending on Visa cards, including debit, credit and prepaid cards, hit €15.5 billion in 2012, up 17 per cent on the previous year. Nearly 15 per cent of all money Irish consumers spent last year was spent on a Visa card. The surge in Visa spending when we all have no money is down to its debit cards. All told, the number of Visa debit, credit and prepaid cards issued last year climbed by 43 per cent while the number of transactions last year went up by 26 per cent.

Across Europe, contactless transactions quadrupled in 2012 and will most likely increase by the same amount this year. Visa is also rapidly advancing its roll-out of smartphone payments and by the end of this year about 80 types of phones will be certified by the company to carry out contactless payments.

Slow take-up

While the numbers look good on paper, the awareness of the contactless world we live in is still not great. “There has been a pretty slow take-up of it, but we have only had them for a week,” one Marks Spencer till operator told Pricewatch last week. “I hope it catches on, though, because it will make life a lot easier for us. There will be a whole lot less messing at the tills.”

That messing typically involves money. Irish people still love their cash. Research published last month by Mintel found that just 20 per cent of Irish consumers reckoned contactless cards would be more convenient than cash. This love of the green means Irish consumers carry €78 million in cash every day, or €23 a day per person. It may not sound like a lot but it is twice the EU average.

Last week we carried out an admittedly unscientific poll on Twitter about contactless cards. We asked users how many had made a contactless transaction so far. Most people said they had not, and those who had were clearly delighted with themselves. Laurie Winkless said she had carried out multiple transactions “in MS and Boots in the UK . . . It’s great, super-easy,” was her take. Another user, John Murphy, has had just one contactless experience to date, which he described as “easy/weird”, while David Gough used his card for the first time last Tuesday in Itsabagel. He “touched the card off the reader and payment was taken almost instantly. I’m impressed.” Padraig Reidy has bought groceries and coffees and he describes it as “surprisingly thrilling”.

Thrilling is an odd word to describe something as seemingly dull as paying for your shopping, but Pricewatch gets it. Last week we used the contactless card for the second time – we tried it in London last summer – and there is something quite liberating about simply swishing your card over the terminal and moving on.

Contactless is just the start. In the months ahead Visa will be pushing its V.meintegrated digital wallet. This technology will allow consumers complete online transactions with just one click, and it is being rolled out in the UK, France and Spain this year, with Ireland pencilled in to be next. It has also licensed about 80 smartphones that will double as credit cards after a successful trial in the Catalan town of Sitges a couple of years ago.

With all these new ways to spend, all we need now is some cash.

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