Check out this report from Finance Markets about cashless retail:
The days of scratching around for coins in your handbag or pocket to buy a newspaper or sweets could be numbered. 16% of people said they often do not buy daily items such as a coffee or a newspaper because they do not have change or do not want to break into a note.
Consequently, MasterCard has launched a new generation of ‘Tap & Go’ cards which allow people to purchase items costing under £10 simply by touching a chip card against a reader.
HSBC bank and retailers such as McDonald’s and Coffee Republic have already signed up to use the MasterCard system, which is called PayPass. It has been introduced in certain parts of London and will be rolled-out to the rest of the capital later this month with the remainder of the UK in 2008. It is expected that 5 million of the cards will be issued by the end of 2008 and will be recognised by 100,000 retailers.
Be sure to read the full report. This type of cashless trading is what the Myki system for Victorian public transport is/was being built on – the project is a year late due to technology issues. With major retailers signing up to support the UK MasterCard project it is afir bet it will come here.
Notice the first example in the story? Buying a newspaper. The risk for the retailer from cashless trading is the per transaction cost. While it will be lower than current credit cared costs, it will be interesting to see how it compares to the cost of transacting in cash.
Newsagents are at the end of the food chain on things like this. Our independence works against us because of what suppliers say are difficulties in negotiating deals with KPIs and disciplines built in. Maybe this is where the major software providers with 500 or more sites can help newsagents compete through a common platform.