Contactless NFC payment to aid boom in British transport

The popularity of Transport for London’s (TfL) Oyster card has pointed the way to ensuring congestion is kept at a minimum on all British transport with NFC technology.


Public transport usage in Britain is booming. In the last year, the number of train journeys rose by 5% and some commuter rail services are predicting a 50% increase in passenger numbers over the next decade. As trains, trams and buses become busier it is in everyone’s interest to ensure that congestion is kept to a minimum and bottle necks, such as ticket offices, are kept as clear as possible. Achieving this is of benefit to frazzled commuters who battle daily with the crowds at stations and to transport companies as they work to ensure that they provide the level of service that their passengers expect.

The popularity of Transport for London’s (TfL) Oyster card has pointed the way to achieving this. A quick, seamless payment system has helped keep through-flow at stations even in the face of record passenger numbers. But with TfL announcing that Oyster will be replaced by a contactless alternative, there are further moves to make payment on the go easier and even more intuitive.

Contactless payments are ideal for getting ahead during the rush-hour as they can be processed 52% faster than cash and 33% quicker than chip and PIN payments. By simply holding a card, or tapping a phone, over a contactless payment terminal, time spent in exasperating rush-hour queues can be reduced for commuters.

Thus far, contactless has mainly been associated with food and shopping, as retailers throughout the UK roll out the technology and customer awareness of the benefits continues to grow. McDonalds, EAT, Pret A Manger, Subway and Little Chef are already taking advantage of contactless. However, the £15 limit for contactless payments quite clearly lends itself to transport given that the average journey cost is a shade over £5.

The convenience of contactless took a step forward in May, when Barclaycard and Orange launched the UK’s first contactless mobile phone. Like the TfL Oyster card, the technical side works through wireless technology called Near Field Communication (NFC) where the payment terminal talks to the card to allow payment to happen (shown in top image with Google Wallet).

Contactless as a method of payment is already proving popular, with transactions through Barclaycard terminals alone growing over 150% year on year, between 2009 and 2010. Already, over 55,000 retail outlets have the technology at their disposal and Barclays and Barclaycard alone have issued 14.8 million contactless cards since they introduced the technology into the UK in 2007. The major challenge has been to educate the public and demonstrate to merchants that there are real, tangible benefits for them. We are now turning that corner. Recent research shows that almost half the UK now recognises the contactless symbol, which represents a significant increase on where we were a year ago.

Research by Barclays and Barclaycard has shown that, contrary to popular belief, Britons do not like to queue, and many would simply walk away if faced with a lingering wait to make a purchase. These findings reinforce the projected success of contactless and commuters are now realising that they no longer have to worry about having the right change and can instead skip a wait in line thanks to faster payments.

Commuters can also enjoy peace of mind when making contactless purchases, safe in the knowledge it is more secure than carrying cash. The technology has undergone rigorous testing and offers a 100% guarantee that customers will be reimbursed for any losses in the unlikely event that fraud does take place. The technology that the industry relies upon in the UK runs over the highly secure chip and PIN system. This offers robust protection against fraud through a secure microchip on the card that communicates with the terminal to authenticate the transaction.

As contactless gains popularity with the paying public, more transport companies are recognising the benefits to them. Trains, buses and taxis are always striving to make journeys across towns and cities easier. Contactless will ease congestion on Tube and overground platforms, while taxi drivers will be able to take full of advantage of the additional tourists, taking more fares as people need only hold their card or phone over a terminal to make payment.

Contactless is also set to improve journeys other than just those on public transport. Parking machines in Westminster already offer contactless payment and other councils are set to follow suit.  Drivers will be saved the scrabble for change and avoid a hefty fine should they find themselves short of cash. In addition, from February 2012, drivers using the M6 Toll road will be able to pay by contactless.

This year contactless has become more commonplace across the UK and 2012 is set to be crucial for the technology as it helps keep London moving during a landmark year for the city. It’s only a matter of time before TfL embraces the technology, to keep us at our ease and on the move as visitor numbers increase and London becomes the contactless capital.

James McDonald is head of contactless payments at Barclaycard

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