Paying with your phone: TechRadar tests the Visa Olympic Samsung Galaxy S3
9th Aug 2012 | 09:30
Are we ready to use our mobiles to buy goods?
TechRadar was invited to take part in Visa's Olympic phone trial to see whether the UK is ready to ditch cash in favour of paying using phones - but is the country ready yet?
We joined 800 others – including Olympic athletes – in using the official Olympics phone from Visa: a Samsung Galaxy S3 equipped with a dedicated payment app for three months, with £50 of credit to try out in the Olympic Village and other contactless-enabled outlets.
For those still in dark about contactless payments, it's a system that uses Near Field Communication (NFC) chips in cards to pay for goods, typically under the value of £20.
These chips are increasingly being pushed into phones too, so you could use your latest smartphone to pay for your coffee, morning newspaper or jaunt to McDonald's – mostly the places where you would traditionally use cash.
The Visa Olympic phone was set to up to work anywhere that has contactless payment enabled: this is often denoted by a sideways Wi-Fi-like icon (sometimes with what looks like someone sticking a stamp on), or simply the word 'contactless' on some terminals.
Visa is pushing the notion of contactless payment at the moment in a big way – it wants to gain the obvious financial benefits of replacing cash, but also help bring a new method of paying for goods into daily life:
"Over the last four or five years we've been getting the infrastructure in place in the UK where consumers can pay by contactless card. And what we're putting in place for phones is future-proofing for phones," Mary Carol Harris, VP of innovation and new product and channel development for Visa, explained to us.
"In the UK today we have 140,000 merchant locations for contactless. We're starting to see a mass issuance of [contactless-enabled] cards, and this method of payment is extremely instrumental in paving the way for mobile, as it helps consumers trust the technology and integrate it into their daily lives."
However Visa has set a startlingly high prediction that in just over seven years 50% of all its transactions will be with a mobile device – so we headed out into the depths of the city to see how well we could live by only paying with a phone.
However, while we're starting to see contactless-enabled credit or debit cards being used in real life, we wanted to see if it was as easy to pay for goods using a phone – and whether it was enough to trigger a mindset change from those used to paying by card or cash.
Before we head to the shops, let's take a look at the mechanism that facilitates these payments: the dedicated Visa Olympic app which gives you the access to your cash on your phone.
It's a trial app that doesn't allow full functionality as yet: it's heavily Olympics-branded, and only allows pre-paid credit to be added to the phone. We had to jump through a number of hoops to sign up, including ID verification and card association.
This isn't abnormal though, and while the set up was slightly laborious, it at least gave a sense of security. It also made topping up easy: our debit card was linked to the app so we only had to request funds and enter an 8-digit PIN to gain access.
After that, you're into a cornucopia of advantages over the boring old piece of plastic, which Harris explains is part of the reason for the push into the mobile space:
"There's a mobility factor with contactless technology on phones. If you leave your house in the morning and forgot you phone, you'll go back for it as many can't live without it. Nowadays you can almost get by without your wallet, but the phone has become integral to your daily life," she added.
"When we consider contactless payments on mobile you've not only got the obvious cash replacement advantage, but also other benefits, such as having a screen, keyboard, internet connection, all of which allows you to track your transactions and manage your finances better."
However, there definitely needs to be some refinement when it comes to the transaction history, as we're currently treated to indeterminate vendors each time we paid using our phone – there need to be associated IDs to be of any use.
In the wider world
Visa warned us that this was a work in progress when we signed up for the trial, that paying for stuff when using a phone would encounter problems. It actively encouraged it, to help the brand find the weaknesses of such a system.
And in practice, we'll admit up front there were many – let us recount our major experiences with you now:
(Disclaimer: these experiences are generally based on one visit to each style of outlet, and may not be indicative of function throughout the chain).
Pret a Manger
One of the early brands to install contactless technology, Pret is a store set up for NFC payments. The only issue (and one that prevails throughout our test) is that it only depends on whether the server understands what you mean by 'I want to pay by contactless'.
Most recognise an NFC credit or debit card, but when you hold up a phone, those that don't understand what you're saying look equally dumbfounded.
However, a quick tap was all that was needed once we explained what was going on - and the dedicated readers are a godsend over not knowing where to rub a chip and pin device.
This is where we spent a good chunk of our £50 – taking the lady out for dinner for passing her driving test. Yes, we're that considerate.
However, paying the princely sum of £21 (no, of course there was no pudding. It was only her theory test) brought confusion to the manager, who had to be called when we said we wanted to pay using contactless technology.
Apparently the chain can't accept payment over £15 (it's supposed to be £20 nowadays), despite protestations to the contrary. This was resolved by paying it in chunks, but there was a clear reticence from the store to let us pay using a phone.
Tesco is only just starting to get behind NFC payments, with contactless terminals installed in a small percentage of shops.
However, they're clearly designed for cards rather than phones, as we couldn't actually angle the handset around the side of the reader to allow us to make the payment, with 'you've tapped twice, please try again' messages appearing every time.
It did eventually work, but it highlighted the need for proper space when paying for items rather than just tacking it on the side of a chip and pin reader that's stuck to a till.
Another stalwart of the NFC movement, this was a decidedly more pleasant affair, and not just because we had a Wispa Gold McFlurry.
There was clear signage all around the till area noting how to pay via contactless, we didn't have to ask to activate the system and when we paid using our phone, the young lady serving us said: "That is, like, the coolest thing EVER!".
When your spend your life trying to convince people DLNA streaming is really an awesome thing, the respect of a teenager in McDonald's over a piece of technology is oddly refreshing.
The Olympic Park
Obviously, what with this being the Olympic phone, we had to pop down to East London and see if making all the terminals contactless offered an easier experience.
If you're up to speed with the technology, then you'll be fine. Whipping out the phone didn't provoke the same confused or intrigued response as before, with the staff happy to pass over the terminal to make the payment – and as always, the transaction is done and dusted in a second or two.
There have been noted issues with the technology during the Olympics: Wembley Stadium's contactless payment system failed, causing only cash to be allowed. However, Visa was keen to point out it was the organiser's decision to stop using the system, not its own.
Speaking to Elaine behind the counter at the Olympic Park about the technology was interesting: she confirmed that while there had been some interest in using contactless cards (around three or four used over the course of two days) there had, understandably, been nobody using phones to pay for anything as yet.
That leads us nicely onto one of the biggest issues we faced during the trial: the lack of understanding most serving staff have about using contactless cards, let alone using a phone to pay for goods.
Sure, it's cool – but if we have to ask to have the machines enabled, then it presents a big barrier to the ease of use. The problem is it works in the same way as a card machine, where the till has to be told to accept a different kind of payment. Those systems that we ready to accept payment were fine – it's just not prevalent enough.
Visa is extolling the penetration of contactless cards (30 million in the UK by the end of the year) but the fact is people aren't using them, and that's mostly because they're not really sure how to use them.
For instance, when paying for part of a meal in a restaurant, the waiter picked up the card, placed it on the reader and £12 was debited. No asking if we wanted to pay via NFC, and similarly, no receipt, which will worry those new to the technology.
It took a fraction of the time to pay using NFC compared to paying via card, and it was excellent to see staff knowing how to use the system; but it should be the cardholder that gets to make the choice and tap the screen.
There's also the issue of knowing where contactless payments are available – you can check it out on the interactive Visa map (and there are loads) but having to trawl around and find places we could use the phone to pay for items was annoying.
This would be solved if it wasn't a pre-pay scheme, but we found ourselves buying coffees we didn't really want just to use up the money we'd preloaded.
The good news is we should see a swifter installation of these contactless payment terminals around the country: most of the time these are provided by banks to vendors, and given the banks also make money from each NFC payment, the desire to make it as prevalent as possible is clear to see.
There are already 120,000 of these terminals in place and their numbers are increasing all the time: the Post Office is going to fit them in all its branches over the coming months, and the likes of Marks and Spencer and Tesco are beginning to deploy the technology too – complete with signage denoting the new payment method.
Are we ready?
It's pretty clear we're standing on the precipice of contactless cards being used much more regularly in day to day life. The terminals are rolling out, education campaigns are underway to help consumers know what contactless actually means, and the means of actually paying are becoming more prevalent.
There also should be special strips for contactless payments; currently you're just supposed to wipe your device over a chip and pin machine and hope for the best. Flat services, like Oyster Card readers, would be great if there was space – or at least more direction on where to place the phone.
But it's early days for the system, and we saw a lot of benefit for the service. Security and finance management were high on the list; paying using the phone instead of cash meant that even if we lost the phone, we could stop the account before losing any money… and banks will guarantee the amount too.
Compare that to losing a wallet full of cash, and you can see why it's preferable… as long as you realise what's gone before the thief is buying the whole of McDonald's lunch on your behalf. (Although, in fairness, there is a limit on how much can be spent before a PIN has to be entered).
Would we consider ditching the card for a phone? Not just yet – we can't get over the fact we feel like utter fools asking to pay using a phone – but when most vendors are on board and up to speed, we'll be the first in line to sign our mobile up.