Trends in the dynamic landscape of digital payment: Contactless Intelligence 2016

May 6, 2016 | Emily Norman

Hosted in London at the end of April, the Contactless Intelligence 2016 conference saw a strong first day as the evolving landscape of digital commerce was thoroughly investigated, and the future of the payment ecosystem laid bare.

Emphasised throughout the event was the speed at which ubiquity of contactless payment continues to soar; Visa have, to date, processed some 3 billion contactless transactions – a figure set to rise rapidly, with the company’s goal to see all European POS terminals contactless-enabled by 2020. Already, Spain alone has some 820,000 contactless terminals, and a staggering 77% of transactions in the Czech Republic are now conducted via contactless payment.

In the UK the picture is similarly auspicious, with around 300,000 contactless terminals across the nation, and contactless (as distinct from Oyster-based) payment now accounting for 30% of transactions to London transport giant TfL. As highlighted during various discussions, the technology is being embraced with great enthusiasm by a multitude of sectors – with 10 top UK charities now keen to enable contactless donation.

For consumers, choice is of particular significance, and the impact of enhanced consumer choice upon uptake and market scale is not lost on Barclays. With wearables one of their three pillars of digital payment, the company – having stated their aim to see payments ‘disappear’ altogether – are considering a number of new form factors, amongst them various types of jewellery.

Also made plain was a growing consumer desire for interactive, experiential payment, and the ability to pay in any location. In light of this, open loop enablement was held to be a prerequisite – closed loop is, of course, appropriate for campus or event-based systems, but ultimately, consumers want to travel and enjoy the convenience of conducting their payments wherever they choose.

Transit, too, has a pivotal area of focus and perhaps the clearest example of habitual use of contactless technology. Mass transit is now a global phenomenon, with mobile ticketing global leader Masabi now working in three major US cities (Boston, NYC and LA), in addition to covering Athens and London ferry service Thames Clippers. Masabi’s barcode app is able to address 82% of the ticketing market, where as yet only 9% of transactions are contactless – so scope for potential growth is vast.

Mobile Point of Sale (mPOS), carrier billing, P2P, alternative currency exchange and exchange of goods were all consistent themes, and elicited much discussion and debate. The potential for market fragmentation also provoked comment, with questions put forth as to the potential value of an aggregator in inhibiting fragmentation, and British payment system leader VocaLink suggested as being ‘one to watch’ in this regard.

Other Secure Elements (e.g. TEE or SIM) weren’t explicitly explored as the conversation really focussed on the consumer benefit. This was refreshing to see after many years of debating technology choices.

With surging consumer uptake and continual innovation revolutionising contactless payment, Contactless Intelligence presented a rigorous examination of the payment landscape, and the implications of its advancement. As the payment ecosystem continues to gain ground, we can perhaps only guess at the transformations that lie in store.

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