A recent study (Aug 2012) has shown people don’t feel protected making contactless and mobile payments. It could be the recent security scares, it could be poor communication by the card issuers or it could simply be a lack of familiarity with the new technologies. Whatever the reason people are not happy with contactless and mobile payment technologies.
The study, conducted by UK ATM operator Bank Machine found only 10% of people felt protected using contactless payment terminals and the figure was only 4% for mobile payments (like Google Wallet). This was compared to 37% who felt protected using regular credit and debit cards and 51% using cash. 96% of respondents said they would choose another payment option rather than contactless.
Just 17% said a ‘cashless future’ would make their lives easier. 90% said its important that cash continues to thrive, citing security, convenience and national identity as the primary reasons.
People feel much more confident using cash than any other type of payment method. Cash can be used by anyone with no PIN or other security features. That has to be a concern for the card payment industry as a whole, not just contactless. Only 37% of people feel protected using a credit or debit card with chip and PIN, a technology that was introduced in 1995.
Recent security scares in the press have no doubt contributed to the low confidence in card payments. Many people know someone who has been affected by payment card fraud. PDQ Machine security should be at the forefront of merchants minds.
As far as contactless goes, the introduction of contactless payments has so far seen numerous problems.
- Poor communication: Many people don’t know whether their card is contactless. The study showed 51% of respondents did not know if their card was contactless or not. This is despite over 20 million contactless cards having been issued in the UK to date.
- Security concerns: Security flaws such as accessing card data from a mobile phone and the fact payments can be made without a PIN have caused concern.
- Staff not trained on contactless
London 2012 was billed as the ‘contactless’ games by card issuers, however that didn’t really materialise. The story everyone remembers from the games in terms of card payments was the massive failure of payment terminals at Wembley. At the England UAE match payment terminals failed and there were no cash machines, leaving people hungry and thirsty.
As soon as Google Wallet was released various security flaws were revealed including some embarrassingly obvious ones.
There is no doubt that payments are evolving. If contactless and mobile payments are to be successful there needs to be much better communication and PR by the big card issuers. It is also vital that the industry gets the basics right. Trust in payment terminals as a whole needs to be worked on so customers feel safe paying with any type of card.
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