Russia is about to have its first contactless ATMs installed that will allow for currency transactions via smartphones, including in particular cash withdrawals and other operations using Apple Pay, Samsung Pay and Android Pay services.
To perform the necessary operation, it will be enough to attach a smartphone to the terminal equipped with an NFC reader. This autumn, Sberbank and Russian Standard Bank launched the technology in test mode. It is anticipated that they will soon be joined by VTB, CBOM, Otkritie and other leading Russian banks, which are considering introducing contactless ATMs in 2019.
In Europe, this service did not take hold from the very outset. Despite the fact that the first ATM allowing to perform contactless operations appeared in Spain back in April 2011, the active introduction of the technology peaked in 2017 after it was adopted by the British Barclays, with the geographic coverage still expanding.
Latvia and Estonia in the Baltic region were the last to launch contactless ATMs in the EU.
An important feature of contactless ATMs, distinguishing them from their predecessors, was the added ability to conduct contactless currency operations via popular payment services. Now, this foreign experience is being adopted by the leading players in the Russian financial sector.
“Nowadays, a card is not just a piece of plastic, but a means of payment, which can take the form of a ring, phone or key fob”, says Alexei Okhorzin, director of the retail product department at Credit Bank of Moscow. “The introduction of contactless banking instruments is a promising way of development in terms of the payment service format, which meets CBOM corporate goals to provide customers with high-tech and comfortable solutions for everyday life and business.
Today, over 80% of the bank’s customers use various contactless payment services. CBOM is interested in developing contactless operations using smartphones and expanding the capabilities of its mobile bank using popular services such as Apple Pay, Google Pay and Samsung Pay”.
Withdrawing money from an ATM using NFC technology is another step in the development of contactless operations that have gained popularity recently. According to UK Finance, a major trade association, the number of contactless payments made in the UK increased by 97% to 5.6 billion in 2017, surpassing traditional payment methods in July 2018 for the first time.
Currently, the majority of the UK population prefers contactless payment methods: almost two thirds of the adult population (63%) regularly pay for products and services using contactless means of payment. Moreover, this payment method is as well popular among seniors, people aged 65 and above.
EU residents also save their time, choosing to pay using contactless payment technologies. Thus, according to the international payment system MasterCard, the number of “tap-and-go” payments has increased in Europe by 97% since the beginning of 2018 over the same period last year. In more than 15 European countries, including Denmark, Croatia, Greece, Hungary and the Netherlands, the share of contactless operations exceeds 50% of all payments by card.
According to the MasterCard, since the beginning of this year contactless payments with cards or smartphones have accounted for more than half of all transactions in Russia. In its turn, the Central Bank of the Russian Federation estimates the present share of non-cash payments in Russia in general at almost 50%.
Although the popularity of contactless payments is gathering pace day by day, “we’re far from becoming a cash-free society and despite cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many”, says Stephen Jones, Chief Executive UK Finance.
Statistically, cash payments declined by 15% to 13.1 billion payments in 2017, and still they remain the second most frequently used payment method (34%).
UK Finance predicts that cash will retain this position in the UK in 2027. The number of cash payments in the country is expected to decrease to 6.4 bln transactions in the coming decade, accounting for 16% of all payments.
Experts attribute this trend to the development of technology, as well as to the growing consumer demand for alternative payment methods, including debit cards and smartphones.
“These trends are likely to shift further over the next decade”, believes Stephen Jones, Chief Executive UK Finance. “Developments such as Open Banking are expected to bring extensive changes to the payments landscape, something that will likely shape how we interact with our money in the coming years”.