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Contactless Payment

ACK are committed to delivering a solution for the autumn 2007 London roll-out of Contactless card acceptance at point of sale. We are working now to add support for contactless payment terminals to the core ACK chip and PIN EFT software as a simple upgrade. We will also be ensuring that the ACK Contactless solution can work alongside a bank owned terminal or third party EFT solution - thereby creating greater choice for the merchant.

Why Contactless Cards?

Any retailer who accepts cash for transactions below £10 should benefit from accepting Contactless cards for the following reasons:

  • Speed of transaction: Average total time for contactless transaction is 5 seconds compared to 11 seconds for cash where change is given.
  • Less room for error in cash-taken / change given.
  • Cash float in till - this can be significantly reduced as the number of cash transactions decline.
  • Cash-shrinkage is reduced due to less need for operator to open cash drawer
  • Ease of reconciliation - electronic journal is more easily reconciled.

To be successful, transaction times must be significantly shorter than chip and PIN and this achieved by:

  • removing the need to physically insert a card into a reader,
  • remove the need for any cardholder verification method and
  • remove the need for receipt printing except as cardholder request.

Merchants considering adopting Contactless include:

Newsagents

Convenience stores

Pharmacies

Fast-food outlets

Taxi operators

Vending machines

Car parks

Background

Contactless debit and credit cards are being introduced by Visa, MasterCard, Amex and (possibly) JCB to the UK and other countries as a convenient alternative to cash for amounts up to a £10 ceiling.

The operation from both a cardholder and merchant is very straight forward. Once the tender type has been identified the card holder simply places his Contactless card on the reader and in less than a second details have been exchanged with the EPoS system and the sale can then be concluded. It should be noted that this is not a stored value on the card as in the case of London Underground Oyster cards, the cash is debited directly from the card holders account when the end of day transaction log is collected as for any other debit or credit card.

In cases where the value is above the £10 limit then the sale becomes a standard Chip & PIN transaction. In order to reduce the exposure to loss in the event of a card being misused there is a periodic check where the card is forced on line in the usual Chip & PIN way. This will be based on the frequency of transactions or an accumulated value. However every time a card is used for purchases above £10 and therefore goes on line this counter is reset. In this way it is possible that many card holders will never experience the situation where their contactless transaction for a purchase under £10 is forced on line. Currently the fraud risk for contactless transactions will be carried by the banks.