Increased spending through NFC can weaken the dependence on chip and PIN
Digital wallets have not yet taken off in the UK. They tick boxes for user benefits, notably in making it easier to pay and allowing people to see the balance of cash in the wallet, but the big players are not pushing the smartphones apps or dedicated devices here; and Google has kept quiet about any UK launch.
If there’s a big difference between here and the US, where they are becoming established, it’s that we’re firmly wedded to chip and PIN payments. We feel more secure punching those four numbers into a keypad, so the retailers prefer the technology and the banks remain committed. It would be a massive change for all three to switch to swipe and pay by smartphone.
But the first steps have been taken. Banks are issuing more cards with a near field communication facility for swipe payments, some retailers are taking them up for small transactions, and Transport for London has stopped taking cash in favour of swipe cards for bus fares. Between them they are beginning to build a momentum towards people paying by swipe every day.
It’s probably two, three, four years away, but it should take us to a point where chip and PIN is not as precious to the UK public and businesses, especially those in retail. That’s when they will be more open to using digital wallets, and the point at which Google and its competitors are ready for a push.
If the banks take a lead there would be a better chance of building momentum, as consumers would feel more comfortable with that direct link to their current account. That could provide some interesting competition between the financial institutions and tech companies.
It all comes down working with the consumer mindset, and that takes time to change. But swipe payments will take the UK a step towards digital wallets.
Mark Say is a UK based writer who covers the role of information management and technology in business. See www.marksay.co.uk