E-payments systems have long been a favourite for analyst forecasts. Alongside the wide acceptance of online banking, we have – at various times in the past – been treated to predictions of how infra-red mobile handset payments or SMS-based transactions will dominate the high-street. All have been tipped as the technology that will eradicate cash, and transform the wallet into a base for seamless electronic transactions.
None of these, of course, ever deserved the ‘End of cash’ headline their inventors craved. Indeed, cash, as messy and unsubtle as it can often be – has continued to prevail, accounting for a staggering 80% of all transactions in the UK today. For retail bankers, however, that figure represents an irresistible pool of potential revenue that they have not been able to tap into – until now that is.
See also: Are digital wallets the key to unlocking bank-customer inter-relationships? – Banks have the opportunity to offer new pro-active and personalised services, some entirely out of the traditional banking business scope.
Building on the consumer acceptance of the chip and PIN payment cards, and the growing commuter familiarity with ‘touch-and-go’ travel payment, contactless card technology – as this month’s cover story argues – could well deliver on the e-wallet vision. Barclaycard certainly thinks it has cracked the formula for the e-wallet by combining a contactless payment facility with Transport for London’s Oyster card for travel on the Tube and buses and a standard credit card. The technology-driven convenience and trusted brand will, it hopes, spur the first large-scale adoption of contactless cards.
But the success of Barclaycard OnePulse and other contactless payment technologies is by no means guaranteed. Unlike organisations that deliver business benefits through internal technology implementations, the retail banks must persuade retailers to buy into their technology. Consequently, the product’s roll-out is being closely watched by the UK’s retail community, which sees OnePulse as the testbed for contactless card technology in the UK. Without acceptance by the major newspaper chains, corner shops, fast-food outlets, cinemas and the like, the e-wallet vision may have to wait for another combination of technologies to be realised.
The financial services companies should take encouragement from the words of Robin Paine, CTO of the London Stock Exchange. In this month’s Q&A interview, he highlights how they have proven they have the tenacity and the appetite for cutting-edge technology – not to mention the money – to get contactless cards into tens of thousands of hands.
With the business case already established in travel and in payment systems in other countries, there is no reason to believe the financial services players will not use that experience and muscle to finally make the e-wallet a reality.