Assessment of state of adoption of contactless payment technology in EU. Implications of changing shopper journeys on payment processes. Key behavioural economic criteria to observe when implementing new payment ideas.

1. Merchant Payments Ecosystem, February 18-20, Berlin
Barraclough & Co
Strategy | Proposition Development | Market Research & Insight
Retail Technology | Payments
Geoffrey Barraclough | @geoffreyb | www.barracloughandco.com | +44 7808 14202

2. Merchant Payments Ecosystem, February 18-20, Berlin
The Context of
Contactless
Geoffrey Barraclough | Barraclough & Co

3. Merchant Payments Ecosystem, February 18-20, Berlin
Two nations. Two stories
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments

4. Merchant Payments Ecosystem, February 18-20, Berlin
Source: Barraclough & Co from ECB

5. Merchant Payments Ecosystem, February 18-20, Berlin
Successful payment innovation requires the needs of all
stakeholders to be aligned
Quick
No hassle
Free
Widely
accepted
Shoppers
Quick
Great CX
Hassle free
implementation
Cheap
Retailers
Volume
Margin
Share
Payment industry
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments

6. Merchant Payments Ecosystem, February 18-20, Berlin
Yet contactless is (slowly) gathering momentum in some markets
Visa focusing on UK, France,
Poland, Slovakia & Spain
Potential user base established:
•20% of Visa cards are enabled
•50% of new cards are enabled
(Smartcard Association)
Acceptance network established:
•1.5m enabled terminals.
•All new ones must be enabled by
2016
Result:
•460m Visa contactless tx in 2014
•of which >60% were in UK
4.4% of all transactions are now
contactless. ATV = £8.26. Very little
fraud
Limit increases to £30 in September
2015
It’s a London thing
•50% of contactless tx are within M25
•30% of low value tx in London are
contactless
Driven by
• TFL & multiple convenience stores
• BarclaysBarraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments

7. Merchant Payments Ecosystem, February 18-20, Berlin
From traditionally very simple shopping journeys…
Marketing Visit shop
Geo message
sent to mobile
Make
purchase
Share
on FB
Post
review
After sale
service
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments

8. Merchant Payments Ecosystem, February 18-20, Berlin
…..to today’s much more complex ones.
Respond
to marketing
Visit
shopping
mall
Geo message
sent to mobile
Share
on FB
Post
review
Loyalty
points
Customise
product
Visit
website
Read
reviews
Search
recommendations
Research
product
Download
app
iBeacon
message
Marketing Visit shop
Make
purchase
After sale
service

9. Merchant Payments Ecosystem, February 18-20, Berlin
But each retail sector is changing at its own pace
High
Low
White
goods
Researched
purchase
Researched
purchase
Habitual
purchase
Habitual
purchase
Impulse
purchase
Impulse
purchase
Fashion F1 Grocery Fast food Petrol Rapid
transit Indicative graph only. Source: Barraclough & Co

10. Merchant Payments Ecosystem, February 18-20, Berlin
Payments and shopping is best understood through behavioural
economics
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments

11. Merchant Payments Ecosystem, February 18-20, Berlin
Our research showed five behavioural factors determining the speed
of adoption of new ways of paying
Reflex Pay – how easy is it to break into long standing payment habits?
Speed is relative – shoppers and the payment industry have different concepts of
time
Shoppers are easily discouraged. The first transaction has to be good.
Confirmation – needs to be clear and consistent.
There’s a strong pessimism bias with smartphone payments. Apple Pay may
overcome this
Geoffrey Barraclough | Barraclough & Co | www.barracloughandco.com | +44 7808 14202

12. Merchant Payments Ecosystem, February 18-20, Berlin
Meanwhile retailers are focused on transformation programmes
delivering a much broader and enriched customer experience.
Get me in/out quick
Kiosks and self-service
Retail as theatre
Mobile point of sale
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments

13. Merchant Payments Ecosystem, February 18-20, Berlin
Retail transformation based on three key IT programmes.
Contactless and and other F2F payments will now need to integrate
with web platforms
The speed of process change will accelerate
the move to the cloud.
Head office systems centered around single
versions of truth
Extension of e-commerce platforms into store
Geoffrey Barraclough | Barraclough & Co | www.barracloughandco.com | +44 7808 14202

14. Merchant Payments Ecosystem, February 18-20, Berlin
Some questions for the discussion
Is London blazing a trail or will it continue to be unique?
In which retail sectors will shoppers genuinely value contactless
enough to make the effort to learn a new way of paying?
Which retail sectors can gain competitive advantage, higher
customer satisfaction or lower costs by promoting contactless?
Does the payment industry understand its customers well enough
to position contactless in context of their other transformation
programmes?
Are contactless cards a short, intermediate, step on the road to
mobile/NFC instead?
Geoffrey Barraclough | Barraclough & Co | www.barracloughandco.com | +44 7808 14202
@geoffreyb
Report
available on
my website

15. Merchant Payments Ecosystem, February 18-20, Berlin
Barraclough & Co
B2B Strategy | Proposition Development | Market Research & Insight
Experts in Retail Technology & Payments
Geoffrey Barraclough | @geoffreyb| www.barracloughandco.com | +44 7808 14202