Contactless payment points could be compulsory within the next five years, with British retailers big and small forced to offer the service.
- How to take card payments - The affordable solution
- The best card machines for small businesses (and how to take card payments)
- Is the UK becoming a cashless society?
- Can I get business insurance without a trade licence?
Install or fall
Visa and MasterCard are driving the scheme as part of their attempts to create a cashless society, and according to Mastercard, “from the beginning of 2016 any new payment terminal that gets deployed must accept contactless, and every single terminal must accept it by 2020.”
In essence this means that any terminals without the capability will need to be replaced by 1 January 2020, with any replacement and new terminals purchased set to be contactless from January 2016.
No more minimum charge?
As it stands many independent retailers and corner shops have a £5 minimum spend policy, imposed to cover the charges placed by banks for processing the payments.
Some like Richard Koch - Director of Cards at UK Finance - believe this spells the end of these minimum charges, suggesting that “The compulsory introduction of tap and go payments in 2020 will discourage retailers from imposing a £5 minimum spend.”
According to Koch “Pubs and convenience stores especially are less likely to impose a minimum spend on contactless payments because it helps them cut queuing time and make more sales.”
Editor’s note: As of 13 January 2018, retailers are now banned from charging extra for card payments.
Banks stand to benefit
According to analysts the banking industry wants customers to switch from cash to cards because cards are more profitable. The thought goes that if all retailers accept contactless cards, people will be encouraged to use them, however to prevent potential rip-offs the EU has stepped in, proposing to cut processing costs by as much as two-thirds by December.
Is this good or bad news for your retail business? Let us know in the comments below.