Contactless payments now more popular than chip and PIN - MSE News

aj23_2

redux wrote: »

Perhaps you'd be even safer with no cards at all in your wallet. Or only one. Or two. Then nip home to get another if you lose the wallet.

Yes, we know some people don't like the idea of contactless cards, but slightly too many of the stories against them are quite obviously exaggerated or made up.

Where's your proof of that?

eskbanker

aj23 wrote: »

eddddy wrote: »

Accepting contactless payments is generally cheaper for shops than accepting cash.

In London and the south east, more and more shops, cafes, food stalls on markets etc are stopping accepting cash - as well as the buses etc.

And many newer supermarket self-checkout machines don't have a facility for cash payment.

If the EU regs are withdrawn, it's more likely that stores will start adding a surcharge for cash payment and/or offering a discount for contactless.

How do you work that out? There aren't any admin or facilitation costs for paying cash. It saves retailers having to pass on 2-5% of each transaction if made by card.

Back in post #32, takman already addressed the mistaken perception that accepting cards is expensive and that cash handling is free (or even just cheaper) - the relative costs will obviously vary by retailer size and so on, but if cash was universally better from the retailer's perspective then why are some stopping accepting it?

Anthorn

aj23 wrote: »

So more people are using cards for purchases under £30 than above £30? I don't buy that.

If we look back at the inception of contactless, small purchases were exactly what contactless was touted as: As the blurb was, no need to insert your card and enter your pin for your sandwich, burger meal, etc., just tap your card on the terminal, tap and go. I don't think at the outset for example anyone envisaged unlimited contactless payments in mobile payments, i.e. Apple Pay.

It's not exactly tap and go either because manned or even womanned checkouts often need to be enabled to accept contactless by the operator tapping a button on their display. Thus, there isn't any real time-saving with contactless when compared with chip and pin!

agrinnall

aj23 wrote: »

How do you work that out? There aren't any admin or facilitation costs for paying cash. It saves retailers having to pass on 2-5% of each transaction if made by card.

This post illustrates how little you understand the situation: there are indeed retailer costs for handling cash, and it would be a very rare situation for a retailer to pay as much as 5% of the cost of a card transaction (most will actually pay well under 2%, and if their cost was as high as 5% I think most would not be taking card payments at all).

Ergates

aj23 wrote: »

But that is indirectly the customer, considering the customer needs to use their card in the first place.

The point being - banks *already* charge retailers for processing transactions*. It's part of the cost of doing business - and obviously that gets included in the price you pay for the product or service, as do all the other business related cost - for instance, the cost of handling and depositing their cash.

If a bank decided to start charging the customers, then that would be *on top* of the charge the retailer is already paying. It would be commercial suicide, because all their customers would switch to another bank that didn't charge them to use their card.


* and why shouldn't they? They're providing a service, why should they do it for free?

aj23_2

eskbanker wrote: »

Back in post #32, takman already addressed the mistaken perception that accepting cards is expensive and that cash handling is free (or even just cheaper) - the relative costs will obviously vary by retailer size and so on, but if cash was universally better from the retailer's perspective then why are some stopping accepting it?

I'm not aware of any retailer who won't accept cash? So many places still say cash only precisely for the reason that accepting many low value card transactions ends up costing the retailer a lot of money. Working for a small business, I know this. We don't accept card payments for under a certain amount, because every two weeks we pay a direct debit to Evalon (who provides our terminal) about 3% of all our transactions. We already pay hundreds a month in this terminal charge, so if we also took low value payments, it would be even higher and it's an unnecessary cost to us. So I don't believe that statement.

aj23_2

agrinnall wrote: »

This post illustrates how little you understand the situation: there are indeed retailer costs for handling cash, and it would be a very rare situation for a retailer to pay as much as 5% of the cost of a card transaction (most will actually pay well under 2%, and if their cost was as high as 5% I think most would not be taking card payments at all).

If you're talking about depositing cash to a bank, hardly any banks charge. If they do, then you're mad to be with them. Some like Barclay's actually charge businesses for all incoming deposits. It's all set up to charge everyone. You're confusing taking cash as payment and banking that cash. Retailers don't charge to taking it as payment, and hardly any banks charge to deposit it.

eco_warrior

aj23 wrote: »

If you're talking about depositing cash to a bank, hardly any banks charge. If they do, then you're mad to be with them. Some like Barclay's actually charge businesses for all incoming deposits. It's all set up to charge everyone. You're confusing taking cash as payment and banking that cash. Retailers don't charge to taking it as payment, and hardly any banks charge to deposit it.

I assume agrinnall is referring to the other costs associated with cash. Mainly paying the wages of the person who handles it, counts and transports it.

eskbanker

aj23 wrote: »

I'm not aware of any retailer who won't accept cash? So many places still say cash only precisely for the reason that accepting many low value card transactions ends up costing the retailer a lot of money. Working for a small business, I know this. We don't accept card payments for under a certain amount, because every two weeks we pay a direct debit to Evalon (who provides our terminal) about 3% of all our transactions. We already pay hundreds a month in this terminal charge, so if we also took low value payments, it would be even higher and it's an unnecessary cost to us. So I don't believe that statement.

Although I took the comment about cashless businesses at face value from the credible poster who made it in the first place, it doesn't take long to find supporting evidence elsewhere, such as https://www.theguardian.com/lifeandstyle/2018/jun/24/cash-is-just-grief-why-shops-and-bars-want-to-make-you-pay-by-card

3% should be beatable, have you evaluated cheaper alternatives, via comparisons at the likes of https://merchantmachine.co.uk/compare/? Is that combining terminal rental and other fixed costs with transaction fees?

aj23_2

eco_warrior wrote: »

I assume agrinnall is referring to the other costs associated with cash. Mainly paying the wages of the person who handles it, counts and transports it.

But for most that is what they are paid to do anyway. Say if you work in accounts and payments/billing. When I worked at Next, it was the store managers responsibility to count the cash takings and handle it, wasn't paid extra for it or to transport it.