Contactless cards have been around for more than a decade, but it is only in more recent years that they have become a mainstream payment method. Latest figures from UK Finance show that around 111 million contactless cards are now in use, a rise of 18.4% year on year.
This is largely driven by the sharp rise in the number of terminals available, with more than half a million in use in the UK, an increase of 28.8% on the same period last year.
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This sharp rise in adoption of the technology has been keenly felt at Nationwide, where during 2017 the Society issued 5.4 million contactless card taking its total number of contactless cards in circulation to more than 10 million.
Today more than half (53%) of all debit card transactions are made using a contactless card with Nationwide customers spending more than £35.5m in October 2017 alone, an increase of 72% on the same period last year.
Cheques makeover
The cheque clearing process has also received a modern makeover, with the phased roll-out of the cheque imaging process starting in November 2017. New legislation came into enforce earlier this year, which allowed for the image of a cheque to be exchanged rather than requiring the paper cheque to be sent to the issuing bank, which has reduced the clearing time from six days to next working weekday.
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By GlobalDataHistorically the payment landscape has been dominated by banks and building societies, but increasingly we are seeing third parties entering the payments ecosystem. For example, Facebook now allows its users to make and accept payments in Messenger.
We have seen the rise of Apple in the payments eco-system with their Apple pay mobile offering which has simplified a lot of mobile commerce journeys.
The current focus for the payments industry is ‘Open Banking’. The easy access to data – to help customers compare products, speed through application processes and take the friction out of transactions – is something both UK and European regulators are driving payment service providers and financial institutions to accelerate.
We will see the first instance of what’s known as API (Application Programming Interface) technology providing new opportunities and Nationwide are seeking the optimum ways in which our members can benefit from these new developments.
The future of payments technology may also lie within biometric technology. Already today our customers are opening their phone and mobile banking apps using fingerprints and across the industry trials are taking place using blood flow technology and iris recognition.
Who’s to say that one day in the near future we can’t walk out of a shop and pay for our purchases by the system recognising the contours of our face, the swipe of our hand or the unique way we move.
Customer behaviour and expectations of their financial services providers are growing rapidly. Organisations must focus on the comparative value of products and personalised services and determine how to best to integrate services and information seamlessly into customers’ lifestyles, enabling quality digital experiences.
Scott Manson is head of payments strategy at Nationwide Building Society
