Almost a year to the day, we are reporting once more on what was know in 2014 as the ‘Beech Road Experiment’ – a social engineering experiment that looked to rid one UK high street of cash and to ascertain the public’s attitude to contactless payments.
To recap: shops, restaurants and cafes in a street in Chorlton (near Manchester) were only taking payments on plastic or mobile – no cash allowed. Mary Paul, of the Beech Road traders’ association, said at the time, “Businesses can see the way things are going with more money being taken on cards across the board, so this is a very interesting glimpse into the future for all of us.” That same month the British Retail Consortium (BRC) revealed cash use has fallen by 14% in the last five years and that card use was rapidly increasing, with debit cards being used for 32% of transactions compared to 30% year-on-year. Helen Dickinson, director general of the BRC, also commented at the time that, “Customers are taking advantage of new ways to shop and pay. The availability of contactless cards, handy express stores and self-service tills, as well as online sales, has increased the use of debit cards for smaller payments in place of cash.” The experiment was the idea of card payment provider Handepay. Mark Latham, product and innovation director at Handepay said, “The introduction of contactless technology has only accelerated this (cashless) process as transactions are now as fast as the pace of our lives”.
One year on, it is being reported by the Payments Council that “card payments have now passed the ‘tipping point’, overtaking the use of cash in daily life and it’s the spike in lower value card transactions, particularly on contactless, that has been most noticeable over the past 12 months.” The UK’s first ever cashless street includes a deli, bakery, newsagent and cafes – exactly the type of high street businesses that have suffered most during recent years. Twelve months later and the Beech Road ‘cashless street’ retailers have all recognised a further shift towards cards from their customers – who are spending more as a result of this convenient way to pay.
Colin Richardson, owner of Richardson’s bakery on the road, commented, “Turnover has risen seven per cent in the past year and that’s down to the number of customers paying by card. Card payments have doubled in the past year in our shop – from people paying for birthday cakes to workers coming in for their lunch. We also saw an increase since we dropped the minimum spend on the card machine. Contactless payments account for just under half of our card transactions. Public habits have definitely changed and the value of card payments we take is only going to keep rising.” Not surprising as it now appears that card payments now make up 61 per cent of the total income as more and more customers opt to go cashless. Other small business owners in the street have echoed Richardson’s sentiments.
Handepay believe that the success of the Beech Road retailers in growing their businesses as a result of card payments should serve as an example to other independent businesses of the need to adapt to modern lifestyles. Mark Latham, product and innovation director of Handepay, says: “The cashless street day was all about highlighting the fact that those independent businesses who do take card payments are avoiding money walking out the door. Contactless payments in particular are driving the cashless revolution and with the spending limit rising to £30 from September 2015 and the imminent launch of Apple Pay into the UK, this will only move at a quicker rate. The future for the local high street is in making it as easy as possible for customers to continue to shop there.”
And just in case you thought that contactless payments don’t save that much time, new research has revealed that paying contactless saves consumers a great deal of time – 90 years’ worth in fact! It’s the British Banking Association (BBA) that has come to this conclusion, calculating the time based on how long contactless has been operating in the UK. On average, each contactless transaction takes just half a second to complete, compared to seven seconds with a standard chip and PIN card. Up until the end of 2014, 452,912,149 contactless purchases have taken place. According to the BBA, this amounts to a total of 93.6 years’ worth of time being saved by consumers – a statistic that it believes further confirms the convenience of the payment method.
Anthony Browne, BBA chief executive, said, “Banks’ innovative new ideas like contactless cards are helping customers – saving them time and hassle. Technology is changing all of our lives and banking is no different. Banks are investing billions, responding to the wishes of customers who want new and easier ways to pay for things and do their banking.”
So there we have it – empirical evidence that contactless payments helps high street retailers thrive and will save about 90 years on consumers as a group. Is there no end of humanitarian benefits to this magical technology?
As we are entering the main holiday season our news feed will now operate on a fortnightly cycle until the 24th August when we will revert back to a weekly release. Have a good Summer!Steve Atkins Contactless Intelligence