Barclaycard and wireless-network operator Everything Everywhere Ltd. this summer plan to launch the United Kingdom’s first contactless mobile-payment system, the companies announced Jan. 27.
Both parties are working with an unidentified handset manufacturer to place SIM cards inside mobile devices that would enable consumers to conduct payments at terminals with compatible readers. The companies are using the SIM card to support the contactless function because they claim it protects consumers’ transaction and personal data better than using a separate Near Field Communication chip.
The card will feature MasterCard Worldwide’s PayPass contactless-payment product, and Gemalto NV will be responsible for Barclaycard’s trusted service management operated services, which enable the secure deployment and management of mobile contactless payments, according to a press release.
Neither Barclaycard nor Everything Everywhere was available for comment.
Everything Everywhere is a partnership between France-based mobile-network operator Orange and German operator T-Mobile, a subsidiary of Deutsche Telekom AG. Barclaycard and Orange entered into a strategic partnership in 2009 (
The companies are positioning the launch as “the beginning of a revolution in how we pay for things on the high street,” Gerry McQuade, Everything Everywhere chief development officer, said in a press release. “It’s a cultural shift that is as important as the launch of the personal credit card or ATMs.”
As with other contactless or mobile-payment initiatives, industry observers’ views are mixed about the type of impact the launch could have in the marketplace.
Barclaycard has stated there are 40,000 contactless terminals across the UK to support the rollout. But much more are needed, contends Nick Collin, a director at Collin Consulting Ltd. in London.
“It’s never enough to have the [contactless-payment capability],” he says. “You have to have the terminals as well, and people always underestimate that barrier.”
What the Barclaycard and Everything Everywhere partnership needs is “a few big retailers to come on board with the terminals or, longer term, for the terminal manufacturers to make contactless standard,” Collin says.
Contactless terminals are located in various UK retail locations, including quick-service restaurants such as Pret A Manger Ltd., Eat and Little Chef, the companies said in their release.
Matt Simester, director of Auriemma Consulting Group in the UK, agrees that contactless acceptance is limited. But Barclaycard’s contactless initiative also plays a factor in adoption.
“Barclays and Barclaycard have been driving up the contactless-volume game, and where they start others will set forward quite quickly,” Simester says. “I expect to see both (basic) contactless and (more sophisticated) NFC rapidly rising in terms of its share of transaction volume in the UK.”
Trust also plays a role in consumer adoption, Simester argues. The Barclaycard brand is easily identifiable to consumers and deemed trustworthy with regard to payments, Simester says.
“The technology can be adopted by any third party, but would you necessarily want just a [wireless operator] to process your payments” when Barclaycard has a history of doing it better, he adds.
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