Research from YouGov’s Mobile Wallet study reveals low awareness and usage rates for contactless card technology, indicating that banks and retailers need to do more to increase usage of the technology, according to the study.
Mobile Wallet, a study looking at NFC (Near field communication) and contactless technology, has found that just 12% of the British population believe they own a contactless card. Yet according to the UK Cards Association, there were 19.6 million active cards in the UK in November. Similarly, consumer’s awareness levels into retailers providing the technology remains incredibly low. Just 8% of the British population and 13% of contactless card owners recognise McDonalds as a ‘wave-and-pay’ provider – the most recognised outlet in its findings. Results indicate that educating consumers about contactless technology remains key in increasing awareness and adoption rates.
Russell Feldman, associate director in YouGov’s Technology and Telecom’s team, said: “As expected, more and more retailers are hopping on-board the contactless bus with McDonalds and Starbucks being some of the bigger names. However, the vast majority of retailers do not offer the technology and could potentially be missing out on reducing queue times and gaining more foot fall – something retailers desperately need in the current climate.”
Awareness rates of banks offering contactless cards among the British public remains low – two thirds of the population (67%) are unsure as to which bank offers contactless cards. Awareness levels amongst contactless card owners are much higher, with most owners identifying at least one bank that offers the technology – Barclays/Barclaycard remains at the forefront of the competition with 66%.
Feldman added: “It is up to the banks and other financial institutions to help educate the consumer in the technology, its benefits, and allaying any security fears. Retailers also need to make the public aware that they accept the technology and that paying with contactless cards can speed up the payment process.”
As well as the highest awareness levels, Barclays/Barclaycard also has a considerable share of the market – 71% of contactless card owners own a Barclays card with contactless technology. The next highest competitor is MBNA (10%), followed by Lloyds TSB (5%).
Actual usage rates among owners of contactless technology remains low as the vast majority of contactless owners state that they have never used their card for a contactless transaction (80%), with most owners making transactions using chip and pin. Only 5% of owners use their card for contactless transactions more than once a week.
Looking at contactless card owners who use their cards regularly in further detail, the research found that they typically use the technology to pay for small transactions in food and drink outlets. The most popular venues being fast food restaurants (27%), coffee shops (26%) and sandwich and grocery shops (26%). The majority of consumers are spending up to £10 on each transaction (74%). Interestingly, consumers are spending a smaller amount (wave on wave) – wave one (conducted in May 2011) saw 34% of consumers spending £10 to £15 compared to just 18% by wave three (conducted in November 2011).
Among those contactless card owners who do not use contactless as a method of payment, over half have expressed a desire to use the technology in future (59%). The majority of these cited ease of payment/convenience (41%) and speed (26%) as key advantages as to why they wish to adopt the technology.
The main encumbrance cited from owners of contactless technology who don’t use their card in a contactless transaction is the lack of retailers offering the service (27%). Security is also a growing issue amongst consumers – an increase in 12% (May 2011) to 20% (November 2011).
YouGov’s Mobile Wallet study, interviews over 2,500 respondents, on a quarterly basis. This is the third wave of research, with previous waves conducted in May and August 2011. The next wave is due in February with a report scheduled in March 2012.