London Contactless Payments Stuttering

The latest issue of Mobile Payments World has been reporting on a less than overwhelming success of the rollout of contactless cards so far in London.

Barclaycard has announced that all its cards will be contactless by 2011, but will they be used?

Ivan Brooks, VP and CIO for McDonalds reported “very low usage indeed” at their 13 restaurants, except at the Paddington office, near Visa Europe’s head office, at the café of which the use is high.

Boots have also shown reservations stating that it costs them 15 times more a year to bank card transactions than cash, indicating that banks would need to lower long-term merchant service charges to make the system attractive – for example each transaction costs around 5pm which can be a high percentage when the only good being bought are low cost items.

Yo Sushi has found that the £10 limit greatly reduces the number of transactions it takes and it also said that the lack of portable contactless terminals was a problem as was the accreditation process.

There is a certain amount of a business case as it will save people having to insert their cards into the machine – however, that is nowhere near compelling enough to change and the extra speed will not be overwhelming when you having to key the PIN in for over £10 or every couple of transactions in any case.

I also worry about the technology. Ethical hackers have already been able to pull data off the cards with simple scripts. If this is possible, how much easier would it be for professional criminals. At the minute the terminal has to be compromised in some way where as when you’re dealing with RFID, you are opening up a much larger can of worms.