The race towards a cashless Olympics

It has now been two years since Visa announced its aim for the 2012 Olympics to be entirely cashless for visitors. With less than 18 months to go, however, we are still some way from realising this goal.

The technology that enables contactless payment transactions is not new, but only recently have all the pieces of the jigsaw – card issuance, merchant acceptance and consumer usage – begun falling into place, thus accelerating adoption. Significant progress has been made over the past two years, including an increase in the contactless transaction spending limit from £10 to £15 and Visa’s millionth contactless transaction.

More recently, Orange and T-Mobile, together with Barclaycard, announced Everything Everywhere, an initiative that will see NFC-enabled SIM cards issued that enable customers to pay for items using their mobile phones. Retailers such as Co-op and EAT have already signed up, with more sure to follow. O2 has also revealed plans to launch a mobile wallet using NFC technology.

So while the pace appears to be picking up, progress has not been as swift as originally anticipated. This is due partly to the banks and card schemes being unable to convince larger retailers of the business benefits this technology brings.

There has also been some consumer apprehension around security. All stakeholders in the payments industry have to take responsibility for this and need to work harder to overcome some of the misconceptions and highlight the benefits of NFC as a secure, easy-to-use solution.

There is a perception that the technology does not offer many commercial or practical benefits. This is simply not the case. Consumers can enjoy faster-moving queues, swifter purchasing times and the freedom of being cashless. These time-saving benefits become even more invaluable during periods of peak purchasing such as those we will inevitably experience when London hosts the Olympic Games.

Retailers and hospitality vendors that have already deployed contactless payment technology have recorded ROI figures that could easily lead others to follow. These include larger average ticket values compared with cash-only customers and improved customer satisfaction due to shorter queues. Companies are also able to save on the costs associated with labour-intensive cash handling as well as being able to minimise losses incurred due to human error.

London 2012 is a huge commercial opportunity for businesses and a once-in-a-lifetime experience for all those who visit. If we are to have a cashless Olympics, technology vendors, merchants and banks must get set for a race to the finish.

Ian Rutland is marketing director at Commidea