Although contactless payments have beenaround for years and offer a speedier way to pay than swiping acard, they have yet to catch on in a big way. Even in those storeswhere contactless pads are part of the card payments terminals, itis not common to see someone tap a card.
The reason for this is not because of any inherent problem with theavailability of the cards or terminals themselves. American Expressoffers expresspay, Discover has Zip, MasterCard has paypass, andVisa has payWave. A number of large retailers, including Macy’s,CVS, and McDonald’s have contactless readers. Instead, customer andclerk habits make contactless payments a novelty as opposed to astandard way to pay.
Take a recent experience I had in a major department store with acontactless terminal. As I reached up and tapped my card on thecontactless terminal, the clerk reached out, took my card, andswiped it through the terminal. I asked if the contactless readerwas broken, and she said that she thought I was handing her thecard. The idea of a contactless payment hadn’t registered as Itapped my card. I am not the only one who has had this experience.Read about Mercator analyst David Kaminsky’s experiences here.
Even cardholders with contactless cards tend to swipe rather thantap. We are all so conditioned by past experience as to how weexpect cards to work that we are likely to swipe a card first. Theset up and language of the transaction are such that we slide rightinto the old grove worn into our payments behavior by the magneticstripe.
Contactless cards have taken off in the transit segment, where theyhave been in use for years. The Octopus Card in Hong Kong, whichcould also be reloaded and used for purchases at places likeconvenience stores and fast food restaurants, led the way in manyrespects as far as showing the possibilities for contactless cards,transit, and using the cards for more than fare payments. Now, withagencies like PATCO offering open-loop contactless cards in theU.S., contactless use and adoption may get a boost as commuters getused to the idea of tap and go and recognize the same symbols fromthe transit ticket machines at local coffee shops and conveniencestores that they may visit on their commute.
Nonetheless, retailers should not rely on other segments to teachtheir customers about new payments. Those who want to takeadvantage of the benefits of contactless payments should traintheir employees and alert their customers to the availability ofcontactless payments. Clerks prompting customers to use contactlesscards and promoting the “futuristic” aspect of the payment could goa long way towards increasing use of the form factor. In addition,because contactless will be seen by many as a new payment form, itwould be easy to tie it to other technology such as e-mail receiptsin lieu of printing a paper one – which can lead to capturingcustomer data for future marketing and loyalty program use.Additionally, developing a contactless payments habit now will pavethe way for mobile payments and open up new doors for customerengagement and marketing.
