The future of contactless payments

shutterstock_271711736According to research by the UK Cards Association, over one billion contactless transactions were completed in 2015 and around half of all debit and credit cards have the capability to make contactless payments. This allows customers to spend up to £30 without entering their four-digit PIN number – all they have to do is place their card next to a sensor on a card machine. Making transactions in shops is now easier than ever for customers – so how will it develop in the future?

The facts

Last year, £7.75 billion was spent on contactless cards in the UK alone. With plastic quickly replacing cash in a consumer’s pocket, businesses cannot afford to ignore this trend. Credit card terminals, such as those by Card Cutters Limited, are now mobile and fully-equipped with GPRS signal to receive payments anywhere in the country, making it easy for businesses to provide contactless payment methods to their customers.

However, technology continues to develop with the fast-paced consumer landscape and new methods of contactless are expected to gain popularity in the near-future.

Smartphone payments

Apple Pay led the way in the market when it was launched in October 2014. It allowed users to store a digital version of their bank card in their iPhone and they could make transactions simply by tapping their phone against a card system. Google soon followed suit with their rival Android Pay, which launched in the US last year and in the UK earlier this year.

This works through the devices, which are equipped with near-field communication (NFC) chips so that they can interact with card readers within 20cm.

Users download an app and link their payment card to the system and once this has been done, payments under £30 can be made without even unlocking the phone.

Wearable technology

Wearables now do much more than tracking your fitness or showing your smartphone notifications – you can now make contactless payments with them too. 72% of consumers believe that wearable technology will be the future when making in-store purchases.

Wearable contactless payment methods started with watches, but have now expanded to stylish smart jewellery including bracelets and rings, and even jackets with a chip built into the sleeve.

Consumers have embraced the touch-and-go nature of contactless cards and now wearables allow you to make transactions without fumbling around in your bag or wallet to find your bank card.

Contactless payments show no sign of slowing down in the future. With customer expectations changing around the innovative ways to make transactions, businesses must keep up with developments in technology to keep their competitive edge.