End of Plastic as we know it!

PROLIANT

Just stumbled across this article on checkmyfile.com, interesting reading.
http://www.checkmyfile.com/content.asp?display=article&aid=104#cards

bert&ernie

There are contactless trials running in London at the moment. From what I've heard, it isn't exactly going well - take up has been much lower than expected. A significant problem has been getting a critical mass of merchants signed up to use the technology. Although it seems to be popular with some corporates, small independent retailers aren't so enthusiastic.

Contactless is an attempt by the card schemes to get into the low value purchase space - where cash has always been king. Small independents like newsagents and corner shops seem to like cash. They may well pay their suppliers and staff in cash, and there are also the less legitimate benefits of having cash.

One of the barriers to a successful implementation of contactless is the practice of adding surcharges or minimum transaction amounts - common practice in many small merchants with standard credit/debit transactions. Apparently, one merchant was found to be using a £7.50 minimum - not clever given that contactless has a max value of £10.

This is something the schemes need to address through better eduction of merchants and competitive transaction pricing.

Looks to be useful from a consumers point of view, although I would imagine many people will have security concerns - expect to see lead lined wallets for sale on market stalls!

I don't think issuers are entirely convinced though. Credit card issuers don't really stand to gain a lot as the average spend on a CC is something like £60 - people just don't tend to use them for lower value spend. For debit card issuers I cant see any particular benefit either - it all depends on the interchange fees. They wont want to canibalise the revenue they currently get from sub £10 debit spend, yet the fees need to be lower in order to get merchants signed up.

Paul_Herring

Weren't Oyster planning on doing something similar in London?

And until the whole world is using contactless technology, I don't see CC's falling by the wayside just yet.

We still haven't managed to get rid of cheques (I have to bank one every four weeks, since the Council can't/won't use BACS :rolleyes:)