A snapshot of what’s happening at the tills reveals that today’s sophisticated seniors are on the ball with technology. In fact, Barclaycard figures show that the over 50s currently make up half of all contactless users, while 20% are 65 or over.1
“Many over 50s don’t tend to be early adopters, but they are playing a growing role in payments growth,” says Matthew Haines, VP Contactless Business Manager, Digital Consumer Payments at Barclaycard.
Research from Saga backs this up2. It shows that one in five over 50s use contactless cards up to three times a week, with 31% saying they like not having to carry cash and 24% are happy that they don’t need to remember their PIN. Over a quarter say they would like to be able to use contactless in every shop and restaurant.
Contactless card spending by age
What’s driving adoption?There are various reasons for the growth of contactless among older consumers, but a large part of it is the normalisation of the technology.
“Last year, Visa worked with both Emmerdale and Coronation Street to integrate contactless payment scenes into the script of some episodes of these popular programmes,” says Matthew. “It helps to generate a mind-set that contactless is commonplace, safe and easy. It helps take away invisible barriers that can exist in people’s minds.”
Once it starts to feel like a common form of payment, all the other benefits fall into place too. And Matthew says the normalisation process for contactless innovations is speeding up.
“It took seven or eight years for contactless to reach where it is now, but if you look at the impact of the limit increase in September, 10% of £20-£30* transactions that could be done with contactless are already being made that way,” says Matthew. “The adoption curve is becoming shorter and steeper.”
What’s in it for retailers?Retailers save an average of 6-8 seconds per transaction compared with chip and pin, which over time can add up to a big saving in staff and other costs. Add to that the benefits of fewer processing costs than with cash, and Matthew says it’s a “no brainer” to promote contactless to every consumer spending up to £30*.
Once consumers start using contactless, they tend to carry on doing so, he says. The key is to help them over that hurdle of making their first contactless transaction.
“The feedback we get is that simply suggesting consumers use contactless is enough to get them to try it,” says Matthew. “The retailers who are really successful are the ones who empower their staff to encourage customers to use contactless at the point of sale.”
For older consumers this could be about focusing on the things that matter to them, although Matthew says the core drivers are similar to those for younger consumers – with a frictionless customer experience being paramount.
Where are the opportunities?Matthew says new, large-scale opportunities for contactless are centred on transportation, such as trains, buses and parking. The clear benefit is that it makes consumers’ lives easier, removing the need to have the right change available. Those older consumers who don’t have access to their own transportation could find it a powerful and compelling proposition on public transport as has already been proven in London by TfL since their rollout in September 2014.
But Matthew also says there is some interesting work taking place around fundraising, which relates to older consumers since “they often have a stronger ethos around charitable giving”.
One idea is that mobile terminals could be pre-set with certain amounts, allowing people giving in the street to touch their cards to donate a fixed amount.
At the smaller retailer level, Matthew says the opportunities are huge.
“Many consumers no longer undertake large weekly shops and are instead more likely to visit the shops multiple times a week,” says Matthew. With lots of those wanting to pay with contactless, smaller stores that offer it as a payment option could be boosting their competitiveness.
*If you are a Barclaycard MasterCard customer your limit for making contactless payments is £20
1 Barclaycard press release, September 2015: UK contactless spending triples in 12 months