I was speaking with a friend from Barclaycard yesterday, and we got onto the subject of their contactless payment technology. You’ve probably seen the TV ads with the guy on the water slide.
Well I was pretty excited about it until I heard that its only been approved for payment up to £10 GBP because retailers are worried about fraudulent use.
I think the real opportunity for this technology is not in traditional retail, no doubt it’ll be great for the morning paper, packet of cigs or a bottle of wine on the way home. But people understand chip and pin, it isn’t that hard to use, and retailers won’t want to think about increased risk of card fraud in a tough economic cycle.
No I think the real vision for contactless payment technolgy will be in the realms of e-commerce. The major growth channel in the struggling retail marketplace.
Imagine being able to go to a web store and when you get to the checkout your computer system knows all of your payment and delivery details, and securely passes this through to the web store, regardless of the computer you are using. No form filling!
After all, the form is the single biggest point of abondonment online. If a system like this was integrated properly all a consumer would need to do is check a box to opt-in to further marketing communications and enter a PIN number to verify they actually are who they say they are.
Sounds great, so what does say Barclays have to do, and what’s the upside for them?
Well it’s huge. They already have a reputation for world class online security via their PINSentry system. Imagine them developing a USB dongle for every credit card account paired to the contactless payment card. When the user wants to make a purchase they plug it in to tell the computer system that they have the right to use the contactless card.
Next, Barclaycard develop payment plugins for the major e-commerce store software providers, and get a few key players to start advocating the system, or even better develop a complete e-commerce platform for web developers/designers, and in no time you’ve cornered the market. Certainly amongst your business customers anyway…
This could be a seriously secure method of online payment for consumers, and it would lower e-commerce abandonment rates therefore increasing credit card revenues. If it lowered chargeback by single percentage points it would impact on the retailers bottom line, so thats a no-brainer too.
So lets see if Barclaycard can realise my vision, and quickly, they could be onto the next big thing in e-commerce. From what I hear the contactless technology will be licensed to other card issuers and could cover debit cards as well so the opportunity looks massive.
For us guys who work with our clients on e-commerce every day it would be great to be able to develop this concept into a working model and see e-commerce conversion rates rocket.
(c) Roger Martin 6th April 2009