2012 was supposed to be the year of mobile payments but despite claims that they’ll replace cash and cards in the near future they haven’t really taken off yet. The world’s greatest sporting event is every marketer’s dream and Visa claim their PayWave system will make a real impact at the games.
New terminals for the Olympics
Visa say that there will be 140,000 contactless payments terminals operating in the UK by the time the Olympics kick off on Friday. All Visa sponsored athletes at the London games have received Olympics themed Galaxy S III handsets pre-loaded with the PayWave app, which allows them to pay for items at these terminals with a swipe of their mobile phone. 5,000 taxis and 3,000 Olympic retail outlets will be loaded with the special terminals which will work with PayWave enabled debit, credit and prepaid cards as well as mobile phones. The cards work with contactless swipes just like the NFC powered mobile app although a pin must be entered for transactions greater than £20.
140,000 sounds like a big number but is it really? In the UK there are almost one million retail outlets many of which have more than one terminal alone in the UK and that figure doesn’t count restaurants, and mobile units such as those in taxis, so the vast majority of outlets won’t have contactless payments for the games.
Cash is still king
Still a significant percentage of outlets will have the terminal and these technologies have to start somewhere but how many customers are actually using these terminals? Visa won’t release the number of contactless payments made to date although you can make an estimate based on individual bank figures. In 2010 Barclays had 83% of the 9.6 million contactless cards in the UK and they generated 1.7 million transactions. This figure is likely to have increased but even if it has doubled or tripled it pales into insignificance when compared with the 2.8 billion ATM cash withdrawals per annum.
Even in the US where consumers are less tied to cash and use cards more readily, contactless payments can be tricky. In May CNET journalist Brian Bennett tried to see what he could buy using Google’s Wallet mobile payment system in one of the world’s most connected cities – New York. He had some success but nearly every transaction was slow and encountered some problems from having to restart the phone and terminals to register assistants having no idea how to process the payment.
So maybe 2012 won’t be the year of mobile payments but with smartphone sales going through the roof and companies like Visa, MasterCard and Google putting their weight behind the systems 2014 or 2015 may well be.