Retail technology view from the top: Visa Europe's Natasha Toothill

As new systems and digital capability continue to evolve the way retailers run their businesses, Essential Retail is gauging the views of the sector's main figureheads, via a series of exclusive interviews. This week, it's the turn of Visa Europe's director of retailer engagement, Natasha Toothill.

Supermarkets, fashion retailers and service stations are expected to benefit considerably from the recent rise in the contactless payment limit in the UK, and the shift in the limit from £20 to £30 is also seen as a precursor to high-value mobile payments becoming mainstream in the next few years.

Those are the views of Visa Europe's retailer engagement director Natasha Toothill, who argues that retailers' ability to allow this form of payment can bring them multiple benefits in customer service and overall operations.

Her comments come as UK consumers were able to start making in-store contactless payments of up to £30 from the beginning of September. Visa Europe data shows there are a significant percentage of transactions taking place every day that now fall into this threshold, and the theory goes that the easier you make a transaction the better the customer experience.

Toothill told Essential Retail that each retail sector is set to benefit in different ways, adding: "If you think about the fashion sector, the proportion of their £20-£30 transactions is 18% so it will have a huge impact in terms of business opportunity.

"The daily value of £20-£30 transactions is around £4 million."

She added: "Another sector where the contactless limit change will have a huge impact is service stations. The daily value of the £20-£30 transaction in the fuel sector is around £8.5 million – so again you can see retailers benefitting there."

The statistics are based on analysis of Visa card transactions, but Toothill is confident the figures are representative of the wider landscape whatever method of payment is being used. Recent data from Visa suggests the UK has around 50 million contactless-enabled cards and 410,000 terminals in operation, and the growth curve is set to continue – backed up by statistics from MasterCard suggesting the use of its contactless technology has grown five-fold over the last year alone.

The Visa Europe director argues that a wider drive towards card usage can aid retailers from a data perspective, as they create a digital record of what individual consumers have purchased – something that cash payments cannot do. Additionally in the restaurant sector, the growth in card transactions and the increase in the contactless threshold could bring hygiene benefits, with Toothill saying companies in this sector are "trying to take cash out of the restaurant because handling it isn't a particularly clean touchpoint".

Meanwhile supermarkets should see a "huge raft" of transactions moving into contactless, she added.

"In supermarkets the proportion of £20-£30 transactions is around 12%. It's less than clothing and service stations but remember the vast size – the number of daily transactions is over one million per day, and that's worth around £26 million."

Grocery giants Asda and Sainsbury's are among the retailers planning to launch mobile payments, in their various guises, in the coming months – and Toothill sees a direct correlation between the development of contactless and mobile as ways to pay.

"We've always seen contactless cards sitting alongside all the other payments, and we've always seen contactless as a stepping stone to mobile," she explained.

"In the future, the majority of payments will be made on a mobile. We're seeing our penetration of mobile payments – whether it's in a store or eCommerce – increase significantly."

It's a common chain of thought that Britons' acceptance and adoption of contactless payment is paving the way for mobile payments in the UK, but Toothill predicts it's part of a journey towards high-value payments made with mobile devices becoming mainstream.

Retailers such as H&M and Pret-a-Manger already accept high value mobile transactions in certain stores, but at present it is part of the testing process ahead of potential wider roll-out later down the line. The offering is not being widely publicised as the individual companies involved weigh up the pros and cons of providing their customers with such a service.

Right now, high value mobile payments sit at the end of the current evolution in the way consumers pay for goods.

Says Toothill: "People enjoy using cards and like the tap and go mentality. When mobile becomes more commonplace, customers will understand that usage.

"Contactless being adopted so widely in London is partly down to the fact consumers using Transport for London have been using the mechanism for so many years. When it was moved to debit cards, they understood that behaviour."

With Apple Pay launching in Britain in July and Samsung Pay's unveiling in the UK set for later in 2015, she added: "Many more merchants will accept high value mobile payments by the end of the year."

A recent Visa Europe consumer study into mobile money usage found that 60% of UK consumers expect to use their mobile to make a payment at least once a week by 2020.

"We know mobile payments will triple in the next five years with an estimated weekly spend of £1.2 billion. I see it as supplementing the traditional card payment use."

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