By Susan Hicks
Ah, the Olympics. I feel particularly attached to this amazing display of athletic greatness taking place in my home town, probably even more so than the proverbial man on the Clapham omnibus. Not only because I work right in the centre of our fabulous capital and have therefore suffered the occasional marketing overexposure.
My attachment to the London 2012 Olympic Games actually takes me back as far as 2008. It was around that time that many major contactless and NFC technology companies were busy hatching plans on how to utilize the upcoming spectacle to push the vision of a contactless lifestyle. Contactless Intelligence was right at the heart of this buzz: Organizing roundtables, bringing large corporations and up-and-coming technology houses together – it was a great vibe. We even had code names for London 2012 projects – very MI5! We looked at showcases for NFC and contactless technology, discussed ways of how to use this massive infrastructure investment to push the technology we believe in so much. In short – these were the days the “Cashless Olympics” were born. Visa chaired a key meeting then and so it feels great to be invited by them to attend the Games and find out what has come of the discussions way back.
Contactless London 2012
Of course, a lot has happened since those days in 2008 and while contactless is far from ubiquitous today, it is at a critical stage in terms of momentum and UK High Street adoption, with major retail outlets rolling it out and card issuance growing strongly across the board – such as last weeks announcements concerning UK’s Marks & Spencer and the Co-Operative bank. What does that have to do with the Olympics you may ask. Well, my kind host and one of the sponsors of the 2012 Olympic Games, creates and manages the entire payment system infrastructure and network throughout all Games venues AND is the exclusive payments provider of the Games. So, logically, with over 26 million contactless cards and 140,000 terminals in the UK, this was a great opportunity to showcase to a global audience the benefits and advantages of contactless payments. And I was about to be part of that audience. Truth be told, I am quite comfortable with contactless payment already – I am, after all, program director of Contactless Intelligence. But that’s with using a card, not an NFC-enabled phone, such as the Samsung GALAXY S III, Samsung’s Olympic Games themed smart phone, which featured an Olympic Games themed version of Visa’s mobile payment application, Visa payWave. To make purchases, you simply select the Visa icon on the Samsung device and hold the phone to a contactless payment terminal to pay. That’s the theory. But what have I found on the ground, so to speak?
The Olympics Contactless experience near my office by Tower Bridge
London 2012 is not just about the Olympic Village and so I started my search for the “cashless Olympics” closer to home. A large public viewing screen had been erected beside Tower Bridge and a green picnic area is served by a number of local food and drink stands set up just for the Games. Two stands take card payments – Potters Arms & Café Spice Namaste. Unfortunately, when I approach, I am told that they only take standard cards, so no luck with contactless. Thankfully I brought some change, as all the other stands don’t accept any cards at at all. Hmm, I am underwhelmed. I wander over to the permanent cafes and bars on the close by Thames and decide to try contactless card payment. M&S Simply Foods, EAT, Pret a Manger, All Bar One & Browns’ staff tell me they all take contactless payment when my card is shown to staff. Much more encouraging. Browns on the river by Tower Bridge is equipped with Barclays issued terminals. Here, I am informed, staff see contactless as clearly advantageous and, when I dug a little deeper, was told by my waitress that she has been trained to look for the contactless symbol on the card to speed payment. – but still thought the limit was £15. Unfortunately, there was no indication or prominent signage that contactless payment is taken here, so really this is a staff driven effort with waiters looking for the symbol on the card for speed.
Mobile payment: The Olympics Contactless experience at Excel
Last Friday I met up with Jeremy Nicholds, Executive Vice President for Commercial Development at Visa Europe at Excel for the boxing portion of the Olympics. On my visit the first refreshment in the avenue of food and drink venues were four vending machines. Jeremy brought out his Samsung GALAXY S III. The phone was set up with a 50 GBP prepaid balance with the banking element provided by Olympics Sponsor Lloyd’s TSB. It was simple to select the visa contactless icon, choose my water and then hold up the phone for the transaction to take place. The system was easy and all went well – faster than hunting out the change for sure. In fact, you do not even have to turn the phone on to make a transaction – even easier!
Next up, I wanted to see how easy it was to top up the S III, ready to spend on more than vended refreshment. Beginning with a pin entry – securing his phone – Jeremy topped up his balance. He transferred from his NatWest current account to his Lloyds prepaid account directly and to me it looked quite simple and more convenient than finding an ATM to withdraw cash. I wanted to see how this would appear on his own bank statement and so Jeremy simply took me online via his phone to see his NatWest account: The transferred amount was listed as a Lloyds mobile top up listing. All very straight forward, at least from a UK perspective. However, Jeremy advised me that athletes from mainland Europe were also able to transfer funds in a similar manner.
Once topped up, is mobile payment difficult to monitor? Not really from what I saw. The spending history was brought up easily on the S III. I was advised this spend monitoring was dependent on merchants setting up terminals with a code to identify the spend at their store. Pret, as an early adopter, looked like they had left out this step and so one transaction on the phone was not named but numerically coded. Via his phone menu, Jeremy was able to allocate this number manually as belonging to Pret for his records. Great news for discovering where your cash disappears so quickly to!
I was advised by Visa that the whole food avenue was equipped to accept contactless & NFC payment. Of the multiple food stalls in place we visited three food stands; one for pizza, one for a sandwich and a deli for a salad. Jeremy was delighted when the staff member serving him loved the phone and wanted to know how quickly he could have one. Good question – and Jeremy advised me that this is dependent on commercial agreements to be put in place. He anticipated this to be in 2013 and to be driven by bank and MNO partnerships.
I was given a contactless prepaid card to use for my salad. The staff at the deli assured me the limit was still £15, so some education is needed on the new limit of £20 in place since June this year. Staff were well aware of how to take the contactless card, though. They advised me their busiest time was lunch times and said that is when they could really see the advantage of taking contactless payment. Staff found some consumers were a little uncomfortable as they could not believe that something so quick had really taken their payment! In terms of phone transactions the staff reported they had seen just one. Well can we really blame the athletes issued with a phone for concentrating purely on their events instead of performing contactless mobile payments?
Considering that the first possibility to use contactless payments when entering Excel was a vending machine, I contacted Nick Mackie, Head of Business Development at Vianet and winner (along with Coca-Cola) in the 2012 Contactless and Mobile Awards for ‘Competitive Advantage’, for comment. Nick replied “We’re seeing a significant number of contactless payments across the Olympic vending machines – from a wide range of contactless device types – and feedback from virtually everyone who’s used the service has been unreservedly positive. Vianet continues to collect lots of data via telemetry from each vending machine and, along with CCE and Visa Europe, looks forward to gleaning deep insights into consumer usage of contactless payment in the vending space once the data is fully-compiled.”
Coca Cola had planned to deploy nearly 450 new vending machines in and around the Olympic park and pushed its partners hard to incorporate contactless bank card and NFC payment technology to its machines, in order to deliver the best-possible vending experience. To provide it with the tools necessary to address its needs and requirements, Coca-Cola selected Europe’s leading vending technology provider, Vianet – now part of Vianet Group. The resulting unattended contactless-only payment solution offered a simple, fast and intuitive consumer experience, and could be retrofitted to virtually any vending machine enabling the acceptance of cards/devices based on Visa’s payWave® and MasterCard’s paypass® or the NFC payment standards.
Known as Touch&pay™, Vianet’s solution was built using uncomplicated, cost-effective reader hardware which is free of slots, apertures and moving parts making it suitably robust for application in the unattended vending environment. At the centre of Vianet’s hardware solution is its custom-built viTel™ telemetry device, which manages complex communications between the vending machine, contactless reader and payment gateway (powered by VeriFone). The viTel™ also harvests data from the machine in order to update Coca-Cola with actionable business insights empowering the company to execute even better service levels whilst significantly reducing operating overheads. Having met with the approval of both Visa Inc and MasterCard Inc in Spring 2011, the Touch&pay™ solution had already been deployed on nearly one hundred Coke and Mars machines located at Westfield StratfordCity and Westfield White City shopping centres, representing the initial phase of Coca-Cola’s Olympic project.
Overall market results coming through
It is now possible to track contactless transactions separately, so I’m looking forward to seeing the data on how much a difference the technology has made to people’s spend. Visa do have a great reference site The Visa London 2012 Games Spend Tracker that calculates both domestic and international spending in the UK during Games Time. For the period covering the Opening Ceremony and the first two days of The Games (23-29 July) the data showed:
- £445.3 million was spent by international visitors with Retail, Service and Entertainment sectors among the biggest beneficiaries accounting for 27.5% (£122.5 million), 19.2% (£85.5 million) and 13.7% (£61.0 million) of total international spend in the UK respectively.
- There were boosts for Retail, Services and Entertainment sectors with a 13.2% increase in spending on tickets and theatre visits, reflecting visitors’ interest in experiencing what else the UK has to offer prior to The Games.
- Visitors from the USA continue to spend the most at UK merchants (12.3% of international spend), but the Chinese are still spending the most per transaction – £203.04. Other high spenders include UAE (£181.24) and Hong Kong (£134.89).
- Domestic consumer spending reached £7 billion (up 2.0% year on year) and sporting enthusiasm boosted sales in sporting goods shops where spending increased 10.2% week on week and 6.2% year on year.
- The largest domestic spend was on Food and Drink where the increase was 7.3% year on year and 4.0% week on week.
- Domestic consumers – and Londoners in particular – are expecting to spend more on Travel and Recreation and Eating/Drinking Out as The Games continue.
To find out how Visa calculate the data please read the Visa London 2012 Games Spend Tracker.
Of course the economic environment we are all trading in is uncertain, and so to create balance, Visa also anticipate “ increases in spend will be at the cost of reductions in others with spending on Household Goods (net balance of -13.7%) and Clothing & Footwear (net balance -7.3%) expected to be scaled back during the Olympics. Respondents expect the overall net impact of the Games on their domestic spending to be broadly neutral.”
I’m going to sign off this report by letting a restaurant I ate at on Saturday night have the final word and in response to some of the negative feedback from portions of the media and naysayers in regards to the economic impact the games have had on the UK and the nations capital; “ The Olympics in London has been great for business – it’s been like Christmas come early for us”. Well said!