The technology featured in Barclaycard’s memorable water slide advert could be in widespread use by the end of this year according to recent estimates (albeit without the fun of the slide).
Payments using contactless technology are already commonly used for transport – with systems like London’s Oyster card and Hong Kong’s Octopus card (which has been going since 1997) – and now could be making its way across the high street. Trials have already taken place at some Subway, Boots, Tesco and Co-op stores around the country, and this summer McDonald’s plans to install contactless card readers at all its 1,200 branches in the UK. This follows the lead of smaller companies like Caffe Nero, EAT and Little Chef who have already rolled out readers in all their locations.
These contactless debit cards are already available from Barclaycard, Visa and MasterCard, and banks such as NatWest, Lloyds TSB, Barclays and HSBC are all beginning to hand out the cards – which can also be used in the same ways as traditional debit cards – to their customers. There are an estimated 11 million cards currently in use in the UK, with another estimate suggesting that over 40,000 businesses could be geared up to accept contactless payments by the end of the year. The technology could even be built into wristbands at several music festivals this summer.
Using the cards is simple, just hold your card against the reader for a second or so until it confirms and then your payment is done. It should even work with your card still inside your wallet. The technology used is similar to that of RFID, and for extra security you will occasionally be asked to enter your pin as well. All cards currently available in the UK have a transaction limit of £15, so if your card is stolen then the thief can’t get away with much.
However, that’s not where this technology ends. Near field communication (NFC) builds on this contactless technology and enables the payment system to be built directly into your mobile phone. With a range of about 10cm between your phone and the reader, the instructions for use are pretty much the same as with the cards.
This system is already popular in countries like Japan, and the first service to use it in UK is set to launch this summer. Mobile network Orange has partnered with Barclaycard to launch a NFC enabled handset – expected some time between April and June this year – which should work with all existing contactless payment points. O2 is also partnering with Visa to launch a competing service later in the year.
Several phone manufacturers are getting on board, with the likes of Nokia, RIM (Blackberry), LG and Samsung all having announced their intentions to include the technology in future models. There are also rumours that Microsoft will build support for NFC into their Windows Phone platform and that – in a move which will surely move the technology into the mainstream – Apple will include it in the next (or next but one) version of the iPhone. Analysts Juniper Research even predict that one in every six phones will be supporting NFC by 2014. Google are one step ahead, however, and have already included the technology in their Nexus S smartphone, with support being added to their Andorid platform.
The future of NFC certainly looks bright, with contactless payments expected to really take off over the next few years. Another estimate from Juniper Research says that in 2014 over $110bn will be spent worldwide through NFC payments. If NFC in mobile phones is this successful then we could see the uses of it expanded: perhaps combining with Oyster cards and having your travel ticket built into your phone? Or how about using it as an event ticket or as your boarding pass? (Air France has already run trials at Nice airport.) It could even replace your key or key card for easier access to your accommodation or office, all in all meaning one less thing for you to – or forget to – carry around.