Six seconds that will change the world

The Times
Patrick Anthony Hosking
May 2014,
Once cash was king, then plastic changed it all. Now contactless cards are on the march, writes
Patrick Hosking.
Six seconds is pretty fleeting. It's the time it takes to tie a shoelace or peel a banana. It is
also,Tesco says, the time its cashiers spend twiddling their thumbs or staring into space while
customers fish for cash at the tills or key in their PINs.
It is those unnecessary, costly extra six seconds that Britain's biggest supermarket wants to
stamp out, last week announcing it was introducing new "contactless" card technology across all
500 of its stores within the M25.
Any customer with a contactless function on their credit or debit card and there are now 42
million such cards in circulation can now pay for transactions up to 20 by brushing it next
to theterminal. There is no need for cash or PINs.
For Tesco, it's a cost saver. Multiply those six saved seconds across tens of thousands of
cashiers and millions of customers a year, and the new technology means shorter queues and,
ultimately, fewer cashiers and a lower wage bill. For customers, it's an added convenience,
whether at Tesco or other retailers installing the new technology from Waitrose, Marks &
Spencer and Boots to coffee shop chains such as Pret A Manger and Caff Nero, where speed
is essential to their urban, timepoor, impatient customers.
For future historians looking back at social trends, it may just be the moment when the slow
trudge towards a cashless society took a leap forward a turning point when people chose to
use plastic for even the tiniest purchases, whether a coffee, bus fare or newspaper.
Senior bankers are pointing to data from the past few days which, they claim, suggests
contactless transactions are moving from "minority sport" to the mainstream. They argue that,
like the explosive take-up of other new technologies such as mobile phones and broadband,
contactless has reached a critical mass, at which point it is rapidly taken up by everybody.
Monthly spending on contactless cards hit a record 109.2 million in March, up by more than
200 per cent on the same month in 2013. The volume of the transactions has also tripled
to six every second of the day in Britain.
Tami Hargreaves, who runs the contactless programme at Barclays, said: "Shoppers
across the UK have truly taken contactless to their hearts." She expects Barclays customers to
conduct 600 million of contactless transactions this year, double the total in 2013.
Ms Hargreaves also believes that the growth will be exponential as more and more people see
fellow shoppers routinely flashing their cards and going on their way that much
quicker. The point-of-sale displays at tills explaining the technology will also boost

understanding; shoppers will begin to recognise the contactless logo at the till and reach for
their cards rather than their purses, she argued.
"It started as a minority sport, but we're now starting to see a step change in adoption,
acceptance and attitudes. It's spreading from London and the South East to the Midlands, North
East and North West. It's becoming habitual."
However, predictions of a cashless society have been made for years. The first contactless
transaction was carried out in 2007 but most people still have not taken the plunge. Of the 20
millionBarclays debit and credit cards now in circulation with a contactless chip, only two million
of them have ever been used that way.
Of the 46 billion worth of transactions made by plastic each month, just 0.2 per cent by value
used contactless technology in March. By volume, though, the share was more promising at
1.7 per cent of the 958 million transactions. Contactless can't take a huge chunk of overall
spending because of the 20 limit on any individual payment. The average transaction size last
month was just 6.46.
Fears of fraud continue to inhibit take-up, though these are irrational, the banks argue.
Contactless cardholders are protected from loss in exactly the same way as they would be
using PINs to make purchases. According to the UK Cards Association, the losses on stolen or
lost cards last year was a tiny 69,900 just 0.016 per cent of total UK card fraud. Although,
there is usually no PIN requirement, banks set limits so that a user trying to spend repeatedly on
a card in a short time would be asked to key in their PIN. Transport for London has just
celebrated ten million bus journey paid for "contactlessly" and says it has 1,500 new users each
day, (though some may be reluctant users, forced to do so because cash is not accepted.) It is
now piloting similar technology on the Tube.
Young and technologically savvy users are more easily persuaded. Barclays' overall rate of one
in ten adopters rises to one in five in London, and the area inside the M25 still accounts for two
thirds of all contactless spending.
Barclays claims the time saving is even greater than Tesco's experience. Its research
found thatwhile a cash transaction takes 34 seconds on average and a card-with-PIN payment
27, a contactless one takes just 12.5 seconds. For retailers obsessed with
streamlining, that alone may be enough to persuade them to go contactless.
Whether people across Britain are as keen to be hurried and hurtled ever faster through life is
another question.
... and six reasons to go contactless ? It's faster and easier than other types of payment ? You
don't always have to carry cash or worry about looking for exact change when making smallvalue everyday purchases at participating retailers ? You don't have to enter your PIN for
payments of 20 and under. However, you may have to on some occasions as a security
measure to verify that you,the authorised cardholder, are still in possession of the card ? There's
no need to queue for so long as contactless speeds up the time it takes to make a payment ?
You are in control because your card never has to leave your hand when making a payment
at the reader ? You will have a record of all purchases on your account statement