Visa Europe’s Head of Contactless on wearables, Apple and cash (Interview)

With recent figures revealing that contactless technology is becoming more and more popular, PaymentEye caught up with Nick Mackie, head of Contactless at Visa Europe, to explore the reasons behind the technology’s success and how it will evolve in the future.

 

Contactless figures continue to rise

74.5m contactless cards have been issued in September marking an increase of 2.3 per cent on the previous month and 41.0 per cent over the year, according to September figures from the UK Cards Association.

Impressively, £758.6m was spent in the UK in the month using a contactless card. This is an increase of 20 per cent on the previous month and almost 200 per cent over the year, showing people are getting accustomed to the idea of making higher-value purchases on contactless – especially after the spending cap was raised from £20 to £30.

Furthermore, 103.2m contactless transactions were made in the month. This is an increase of 15.9 per cent on the previous month and 220.5 per cent over the year.

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Contactless becoming a feature of wearables

When asked where he sees the technology going, Nick pointed out wearables as the next frontier.

“Increasingly, Visa Europe is seeing contactless payments becoming a feature that wearables manufacturers are integrating into their products.  At the same time, we expect to see examples of wearables that are designed from the ground up for payments – like we show-cased with Central Saint Martins in September this year,” he said.

He added that manufacturers who are in or are entering the wearable arena should always remain “focused on creating an experience that is fast, frictionless and intuitive to streamline consumer uptake – a service solution that is human-centred”.

 

‘Apple drives interest in whatever they’re doing’

The significance of Apple’s foray into the contactless and mobile payment markets should not be underestimated, with Nick saying that because of Apple’s global popularity, everything they do will always attract and drive interest.

They have set a high benchmark with Apple Pay, including the Apple Watch, so I think it has definitely helped increase interest in – and validation of – wearable technology, particularly around payments.

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Yes, despite the relative underwhelming adoption of both services, one cannot deny that Apple’s presence in the contactless market has been anything but positive. The services themselves are not terrible, in fact, they bear the hallmarks of all the ideas consumers have come to associate with Apple: simple, fast, smooth. Mainstream public is still relatively unfamiliar with mobile and wearable payments, but everyone has to start somewhere.

 

Security isn’t a concern, user experience is

Interestingly, in discussing what the current contactless technology concerns are, Nick didn’t highlight security, but rather selected the user experience kinks.

“Contactless technology is safe, secure and fit for purpose.  The issues that have needed to be addressed have not been around security but rather usage.  For instance, when contactless launched on TfL, there were a few initial concerns around card clash.  However, we worked (and continue to work) with TfL to raise awareness amongst their customer as to how to avoid card clash in order to get the best experience.”

 

Wearables, fashion and the younger generation

We then went on to discuss wearables in more detail, in particular exploring the recent partnerships Visa Europe has had with the fashion industry.

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At the end of September Visa Europe collaborated with British designer Henry Holland at London Fashion Week. At Holland’s show, ten VIPs were given custom contactless rings designed preloaded with £500 which were used to buy pieces worn on the catwalk.

Later that month, Visa Europe worked with art and design institution Central Saint Martins College, where the company asked students and graduates to consider how a wearable payment device could look and function by 2020.

“The CSM collaboration was an inspirational project.  Working with people, regardless of their age, who have fresh thinking and new ideas is always stimulating – and this project was no exception.”

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“They brought to the table great ideas around brand loyalty, budgeting and even convenient ways to use up your spare change.  Contactless is already popular amongst younger generations, and this project sharpened our focus on new use cases and form-factors for the technology,” said Nick.

 

The future of payments

Finally, the conversation turned to the future of payments. Nick takes the rational approach and echoes the statements made by the likes of the Bank of England about the concept of cash being on its way out, saying “we don’t think we’ll be a cashless society within the next five years”.

However, cash’s resilience will not hinder the growth of other payment methods, he asserts.

“We do think that contactless mobile payments will grow tremendously.  In my view, I believe it is very possible that, by 2020, contactless technology will be the preferred way to pay for many Europeans.”

He goes on to cite a mobile money survey Visa Europe conducted earlier this year which revealed consumers projected that they’ll spend more than £1.2 billion a week on their mobile devices by 2020, before going on to say, “To be frank, we think that is underestimating it.”

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