Article

M&S marks payment milestone

The retailer completed its deployment of contactless terminals and released significant usage numbers.

May 10, 2013 by James Wester

U.K. retailer Marks & Spencer has made a serious commitment to mobile payments. The company rolled out its contactless payments technology to 644 of its stores, and now boasts soaring numbers of weekly contactless transactions — a hint that shoppers are enjoying the new-found convenience.

The news that a major retailer has committed to supporting both contactless cards and mobile payments is a good story for mobile payments, but it's the existing scale of M&S contactless transactions that may come as a surprise.

According to M&S, it is now the U.K.'s leading contactless retailer, conducting more than 230,000 contactless transactions every week. Approximately one in seven (14 percent) of card transactions under £20 ($31) are made using a contactless payment method, M&S said.

"Contactless and mobile payment is set to be an exciting part of the future retail landscape," said Sacha Berendji, retail director at M&S. "A contactless payment takes place in less than a second, creating a quicker, easier and more convenient shopping experience. Customers are already embracing these benefits and through our roll-out we're ensuring our stores can cater for customers' changing shopping habits."

Contactless and the need for speed

Not surprisingly, contactless payments are being used most frequently in areas where customers are in a hurry and are making small transactions. M&S said a quarter of its contactless payment volume is processed at self-checkout points in the food halls of its retail locations. At the M&S location at Finsbury Pavement in London, approximately one in three card transactions under £20 is made using a contactless method.

"In busy central stores that receive a huge lunchtime rush, contactless payment is helping to revolutionize the customer experience," said Richard Cooke, store manager at M&S Finsbury Pavement. "Self-checkout tills are already very popular, but contactless helps reduce queue times even further, giving customers a payment option that's even quicker than cash."

The full rollout of contactless terminals follows a successful test at 25 retail locations last summer, M&S said.

And M&S isn't the only retailer investing in contactless payments. According to Visa Europe, more than 200,000 contactless acceptance points have been established in the U.K. and more than 750,000 in Europe. What's more, Visa Europe estimated that the number of contactless terminals in Europe is increasing by 10,000 per month.

Though the volume of contactless transactions reported by M&S isn't all mobile payments (the company didn't provide a breakdown of cards vs. phones) the large number of contactless terminals already deployed is an important point in the seemingly endless discussions about retailers adopting the technologies necessary to accept mobile payments at the point of sale.

Committing to emerging payments

This isn't Marks and Spencer's only foray into emerging payment methods. Just last month the retailer announced that it is running a pilot in its coffee shops that will let customers pay with the Paddle app. That pilot is being run through M&S Digital Lab team, a unit within M&S that focuses on how to deploy technology such as mobile payments to improve the shopping experience.

Paddle doesn't use NFC; instead users scan a QR code with their Paddle app. Once scanned, users get a "Pay with Paddle" payment option on a checkout page. They can then enter their payment credentials which are stored securely and can be used for subsequent Paddle purchases.

"Mobile and contactless payment is part of the future retail landscape and this is exactly the sort emerging technology we want our digital lab to explore," an M&S spokesperson said of the Paddle test.

Read more about payments in retail.

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