The staff canteen at Ulster Bank’s Dublin office was the scene of an historic first – Ireland’s first contactless card payment – heralding in a new era of electronic micro-payments in Irish shops.
And last week the head of Visa for Ireland and the UK Marc O’Brien was on a mission to Dublin to brief the heads of Irish banks about the technology’s potential.
The technology will allow consumers who may not have change to use their credit or debit cards to buy small items like newspapers or milk without having to go to an ATM or delay other shoppers by having to enter their chip and PIN details.
It is an innovative solution that provides merchants with a quick, cost-effective way to receive card payments of €15 or less.
The technology works using an electronic wireless receiver in the merchant’s terminal interacting with a radio antenna built into contactless enabled cards. The payment occurs when the contactless card is placed or "tapped" against the merchant’s terminal.
Data is transmitted from the customer’s card to the retailer’s card reader and the transaction is complete. The technology is proven, secure, reliable and easy to use.
The point of contactless payments
“Contactless payments are designed to provide a fast, low cost and convenient alternative to cash. Essentially, customers will be able to ‘tap and go’,” an Ulster Bank spokesperson told Siliconrepublic.com.
O’Brien explained that contactless cards owe their origins to the success of the Oyster Card by Transport for London. “There are now more than 10 million Oyster Cards issued. Visa and Barclays put together a proposal for a 10-year plan to provide Trasnport for London with a card that would help users quickly pay for transport but also use it in shops.
“We are now working with all the banks in the UK to issue a Visa contactless card and we now have 7 million cards in the UK and a further 5 million cards in use across Europe where we forecast widespread adoption.”
Retail outlets like McDonalds, Boots and Costa Coffee across the UK are proving enthusiastic proponents of the payment method.
Visa’s new outlook
O’Brien said that Visa no longer thinks of itself solely as a credit-card issuer and now considers itself mainly a debit-card issuer. “More than 77pc of the value we now process is debit-card related and players like Ulster Bank are migrating their debit cards from Laser Maestro to Visa Debit.”
He said the company is working with retailers who are investing in their future at a time when many businesses are scaling back. Convenience and security are of paramount concern. Retailers like Easons are looking at the technology as a means of cutting queues at the checkout.
“What we’ve done is set counters in the card so that users can only use the contactless card for maximum transactions of €20. If the user clocks up €60 on a given day all transactions after that will have to be by chip and PIN so the user is protected against fraud or theft.”
Contactless payments also offer an opportunity to rejuvenate the vending machine market and Visa is working with fellow Olympics sponsor Coca-Cola to introduce vending machines that users only have to wave their card at to release a beverage.
“Retailers are seeing the value of this technology. McDonalds said that every second saved at a till translates into €1 extra to its bottom line. Customers love it and the feedback we are getting that it is a very natural way to pay.”
Looking to the future, O’Brien said Visa is hard at work researching and developing new ways for people to pay and one of the areas being given serious consideration is contactless payments via mobile phones using near field communication (NFC).
“For us, m-commerce is a strategic priority and we are working and talking with all the mobile operators and handset manufacturers to develop standards for payment on mobile phones.”
O’Brien says Visa spent €800 million over the last five years on R&D out of which €170 million went into chip and PIN. “We envisage spending a further €200 million on R&D into low-value contactless payments by card and mobile device.”
A 1,000-handset trial across London of contactless payment by mobile phone last year was recently voted ‘coolest thing of the year’ by the editors of Stuff magazine, O’Brien said.
By John Kennedy
Photo: Ireland’s first contactless card payment was made at the staff restaurant of Ulster Bank on Georges Quay in January