Barclays PLC continues to dominate the United Kingdom’s contactless-payment market, claiming 88% of the UK’s total base of 12.9 million contactless debit and credit cardholders as of the beginning of the year, according to data the company released March 24.
But competitors are poised to begin chipping away at market share, as observers expect the number of contactless cards in circulation in the UK to nearly double by the end of next year.
Numerous merchants, along with London’s transit agency Transport for London, last year announced plans to add contactless-payment options over the next year as part of a national push to broadly expand contactless card acceptance in time for the London 2012 Olympic Games (
Lloyds TSB Bank PLC earlier this month announced plans to issue about 1 million contactless debit cards this year to UK accountholders (
Barclays, which in 2007 began distributing contactless cards in the UK, says it had 11.4 million contactless cardholders at the beginning of the year, and the total number of contactless transactions it processed through the end of February increased 150% compared with the same period a year earlier. The firm declined to disclose the specific numbers of transactions processed.
More than 1.7 million contactless transactions were processed in the UK in 2010, according to the UK Cards Association. Reliable contactless-transaction data from previous years are unavailable “because the market is so new,” an association spokesperson says.
The 12.9 million contactless debit and credit card in circulation in the UK represents a 72% increase from 7.5 million a year earlier, the association says. The organization projects the total number of contactless cards in circulation to soar by more than 90% over the next year, reaching 25 million by the end of 2012, a spokesperson says.
Barclays and Barclaycard customers may opt to initiate transactions valued at up to £15 pounds (US$26) at payment terminals equipped to read contactless chips. Cardholders do not need to enter a PIN, which speeds transaction-processing time at the point of sale. Payment cards in the UK support EMV chip-and-PIN functionality.
The firm says it has helped merchants to install more than 52,000 contactless-payment terminals in the UK, more than double the number Barclays said existed at the beginning of last year.
Restaurants and entertainment channels are driving the heaviest use of contactless transactions, a Barclays spokesperson tells PaymentsSource. National quick-service restaurants, including Pret A Manger, Subway and EAT, are among major chains that accept contactless payments, along with London entertainment venues Wembley Stadium and The 02.
The Co-operative Food, a major UK grocery chain, last year said it would introduce contactless-payment acceptance at its stores this year, and McDonald’s Corp. in January announced plans to do the same at its 1,200 UK stores this year.
“The range of retailers offering contactless payments (in the UK) grew significantly in 2010, but this is still only the beginning,” Richard Armstrong, Barclaycard head of UK payment acceptance, said in a press release.
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