By Ray Birch
ST. PETERSBURG, Fla.—Instead of passing the donation basket, some churches in England are handing around the digital collection plate—and the new cashless, contactless payments approach to accepting donations is working very well.
The evolution of the collection plate is only one sign among many of the rapidly growing appeal of contactless plastic, and to some extent digital wallets, says one payments expert. Brian Scott, SVP of sales and solutions consulting at PSCU, believes that in 2019 financial institutions that have not strongly embraced contactless payment cards—tap and go plastic—risk losing top-of-wallet standing.
The contactless card wave is coming this year, and CUs need to be ready, said Scott.
“Credit unions, at a minimum, need to be issuing contactless cards as their members’ cards naturally expire,” said Scott. “That is the least they should be doing as this payments shift is one they need to pay attention to.”
What CUs Should Do
Scott recommended credit unions strongly consider reissuing plastic with contactless, pointing to some big moves that have been taking place in the credit card marketplace.
“Target just announced they will enable all of their 1,800 locations with contactless POS terminals. CitiBank, Barclays, PenFed, Chase, and others are mass reissuing into contactless,” noted Scott. “There is an avalanche of these reissuings coming this year.”
Scott pointed to a number of other changes that indicate consumers are ready for contactless cards. Among them, the aforementioned partnership between technology firm SumUp and the Church of England to allow parishioners to make contactless payments using a portable device. The Church of England has more than 16,000 churches and 42 cathedrals in England and Wales, with the digital collection plate already is being used at about a dozen.
‘Pass the iPad’
“So instead of passing the hat, it’s pass the iPad or some other electronic device,” Scott said. “To me, that signals how ready consumers are for contactless payments.”
Brian Scott
Scott said the Church of England saw a 97% increase in donations as a result of the switch, noting the church saw a surge in donations from younger parishioners. Churchgoers pick a sum from four options decided by the church, before using a card or smartphone to pay.
“This is pretty interesting and really speaks to the ubiquity of contactless payments,” said Scott. “This is a wave you want to get out in front of early, so you don’t lose top-of-wallet status. Once people get used to contactless payments they won’t want to go back to dipping or swiping.”
Scott acknowledged it has taken more time than originally expected for contactless payments—meaning digital wallets—to catch on. He believes contactless cards, which seem more familiar to consumers than using their phones at the point of sale, will be the bridge to eventual greater digital wallet usage.
What MasterCard Report Shows
A new report from Mastercard shows contactless momentum is growing in the U.S., stating 95% of all new checkout terminals are contactless-ready. Scott pointed to digital issuance as another sign contactless payments have greater momentum today.
As CUToday.info reported, digital card issuance brings with it some big benefits for issuers and digital wallets as well. Digital issuance is when an issuer provisions a new card number directly into a user’s mobile wallet. The service will likely get its greatest usage following a data breach that forces issuers to mass reissue cards. Instead of telling members their card has been deactivated to protect them while they then wait a week for a new one or stop by the branch for instant-issue, FIs can now say a new card is now in a person’s wallet and they are able to go on spending uninterrupted.
Analysts have stated mobile payments adoption has been much slower than expected as consumers have not seen any real advantage in pulling out their phone and tapping instead of inserting or swiping their plastic.
Apple’s Newest Solution
But a new solution from Apple may finally encourage more consumers to begin using their phones to pay at the point of sale rather than pull out a plastic card—a behavior change that will get an additional nudge as its merchant friendly.
As CUToday.info reported, with Apple's newly announced enhancements to its iPhone, any external device—such as a POS terminal—can now open an app automatically or trigger an Apple Pay payment by simply sending an NFC signal to a phone. The key here is the user doesn't have to manually open an app anymore to pay.
The move could also sway merchants that have wavered on employing tap-and-go at POS, analysts have stated. Now, triggering an Apple Pay payment doesn't require an expensive POS terminal. Instead of using a POS terminal for in-store card-present NFC payments, an Internet of Things device would trigger a mobile card-not-present payment, just like when using Apple Pay online.
“These are just more signals to everyone in the marketplace that contactless is coming in a big way,” Scott said.