It’s no surprise the tipping point for card payments in UK has been reached earlier than many experts predicted, given the speed with which the public has adapted to contactless technology in the last 18 months.

Debit, credit and charge cards were used for 10.3 billion transactions in 2016, giving them a 54% share of the total, the first time they have been in the majority.

In part this is because more contactless-enabled cards are provided to consumers by the card-issuers. Other significant factors affecting the rise of contactless have been the increase in the payment limit to £30 in 2015 and the technology’s active embrace by public transport, parking meter and toll-point operators, making it easier to pay by card rather than searching for change. Equally effective have been the efforts of many retailers who encourage shoppers to use contactless at the point-of-sale, resulting in a 35% increase in contactless payments.

Everyone sees the benefits

We have certainly come a long way from 2014 when our research at Vista found that 50% of all retailers had no plans to install contactless payment because of cost and disruption. Only a third were able to take contactless payments and many could see no prospect of a return on investment from this technology that only seemed popular with students.

Now everyone appreciates the speed and convenience of contactless card payments. Few of us want to be weighed down with a lot of notes and coins anymore – it just doesn’t feel necessary.

One sure sign that cards are now part of everyday life is that although the number of card transactions has shot up, the average value of each transaction is declining. No longer are cards viewed as being primarily a secure way of paying for more expensive items. This again, is largely driven by the growth in contactless payments.

As contactless transactions ever more predominant, consumers will notice how queues in busy convenience stores and supermarkets are even further reduced. This will be especially the case if retailers with large premises invest in smart technologies that monitor footfall accurately and allow for better layout and optimised use of tills in relation to surges in demand. Even better if they give staff the chance to take payment on the shop-floor using mobile devices.

Those retailers holding out against contactless payments will surely risk being left behind. There is now little logic in such reluctance. Many card-reader devices are already equipped for contactless and in most cases, success will just be a case of making more effort to encourage staff and customers to use the technology at point-of-sale.

In every segment of retail the dominance of card payments is only going to increase because of the convenience factor and the way younger consumers can see the benefits of digitisation right across their lives. The fact that a giant such MasterCard is requiring all its subscribing retailers in Europe to install contactless payment technology by 2020 will also create unstoppable momentum.

Cards are not the end-point

Cards are not however, where payment evolution comes to an end. As consumers become more confident about biometric security based on their unique physical attributes such as blood vessel patterns, the use of smartphones for payments with a mechanism such as Apple Pay is going to carry on expanding. With Apple Pay there is no upper limit on spending and now more than half of the UK’s contactless terminals are enabled to take its payments.

Smartphone payment is such a lucrative market and has so many potential tie-ins and spin-offs that it is bound to be pursued aggressively, particularly in conjunction with apps. Payment through apps using a mobile wallet is shaping up to be an attractive proposition for many consumers who are understandably reluctant to change their habits.

We can also expect to see a continued push to market wearable devices such as fobs, wristbands and smartwatches for payments. Barclaycard is actively promoting its bPay band for example, on the basis of “without a card is in sight”. 

Enabling payments via wearables may seem as unrealistically viable in everyday retail as contactless did in 2014, yet it will give a retailer significant loyalty advantages. Customers can be enticed to sign up to loyalty programmes and build up credits that can easily be monitored and redeemed through a wristband, or smartwatch.

Retailers enabling wearable payments can take the initiative and encourage queueing customers to use the technology, just as many have to boost the use of contactless cards. If customers also sign up to loyalty programmes, then as a retailer you have access to valuable profile data you can use for personalised marketing, which is a real benefit.

The key point is that retailers cannot just rest on their counters and assume cards are the only game in town. Payment technology is constantly evolving and anyone running a store, restaurant, bar or hotel needs to be constantly on top of it, ensuring they have access to expert guidance.