A guide to Contactless Payment and the Future of Card Transactions

Also known as ‘wave and pay’ or ‘tap and go’, contactless cards are a method of paying for cheap everyday items without having to go through the chip and pin process. Of the 27 billion UK cash transactions every year, around 80 per cent of those are under £10.

But, since Barclaycard launched the first credit card allowing contactless payment, it has not caught on as quickly as many experts had envisaged.

In the banking industry there is some dispute as to whether or not the public have taken to contactless payments. ATM operator Bank Machine recently published a survey that said 51 per cent of Britons have no idea if any of their bank cards are enabled for contactless transactions, and also highlighted concerns about fraud.


But within a few days of that report, Barclaycard issued research stating 84 per cent of the public recognise the contactless symbol – with six in 10 people saying they prefer cards to cash for purchases up to £20.

Between them, Barclaycard and Barclays have issued more than 19m contactless cards in the UK. And the number of contactless payments is around 1m a month. The idea is to save customer time and also reduce the risks of handling cash. Despite the dispute, contactless payment is now making its way into the world of smartphones.


Britain’s big three mobile networks, EE, Vodafone and O2, have united on a project to make debit cards of smartphones – virtual wallets that know who we are, where we are and what we buy. The idea is not a new one, but despite the efforts of companies ranging from Google to Barclays it has yet to gain traction with consumers.

Google Wallet was launched in the US in 2011 but is yet to be introduced in the UK. But Weve – the company set up by the networks to manage the mobile wallet project – says 15 million mobile phone customers have already opted into its service.

At the moment, users only receive text messages alerting them to offers. But once Weve has opened its database fully, companies that buy advertising slots on web pages will be able to access to data ranging from physical location to the websites they visit on their phones. Alongside this, there are plans for an application capable of holding dozens of virtual loyalty cards.


There are still some concerns over security, though, especially in the case of phone payment. Not only will you lose your device, but potentially your hard earned money with it. Mastercard says a card could be used up to five times before a user is required to enter a PIN. Depending on the transaction limit, this could add up to £100 lost.

There are also concerns about cards being ‘hacked’ while still in the user’s wallet and that contactless payment cards could be potentially much more expensive for retailers to handle than cash.

A few simple steps

If you’re still interested in contactless payment, the method is simple. Your card contains a chip and a radio frequency antenna so when you tap your card against a reader it transmits payment details wirelessly.

You don’t have to key in a PIN. Instead goods are paid for by touching the card on a till-side reader. The money is then deducted your account.

Look for the contactless payment symbol

When you are ready to pay, ask the merchant to ring up the sale

Tap your card against the reader

Within seconds the reader signals authorisation of the purchase

Then you can then ask for a receipt if you want


Christina Jones is a freelance finance and marketing writer, specialising in e-commerce and Payment Processing. She enjoys reporting on the latest developments in the ever changing  online retail world.

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