When the final move of the PIN@POS initiative occurred in the second half of October 2014, when each card issuer’s host computer system was reprogrammed to “reject” transactions not accompanied by a PIN when they should have been, there was hardly any disruption at point of sale at all. When most cardholders received a “rejection” message on the POS terminal screen, they just proceeded to enter a PIN (which they clearly knew all along) and complete the transaction.
What made the change to PIN go so smoothly? Was it Australia’s 30 year exposure to using PIN at the point of sale terminal (due to EFTPOS)? Was it that Australians are more flexible and adaptive than most; and becoming more so? Was it the great planning and communications campaigns of the issuers, acquirers and the Industry Security Initiative? Probably a combination of all of these.
But the most recent change in behaviour, which has not been pushed by the card industry at all, is the dramatic growth in “Tap ‘n’ PIN” for POS transactions over $100. This is where a contactless card transaction occurs which is above the “no authentication needed” limit of $100 and the cardholder then enters their PIN to authenticate the payment.
One of the major international schemes has reported 15 per cent of all its contactless transactions in October 2014 were for amounts over $100 - a percentage that has shot up from next to nothing just six months earlier. It appears this behaviour has been wholly driven by both cardholders and merchants themselves, who seem to have noted how quick, easy and convenient a “Tap ‘n’ PIN” transaction can be, as it avoids the need (and time) for finding the slot in the terminal in which to insert the card and then having to select between Cheque/Savings/Credit.
Both the adoption of contactless and of PIN@POS were accompanied by significant industry spend on communications programmes, using both above and below the line channels, and “hammering” cardholders and merchants with consistent and hard hitting messages.
Yet a particularly interesting facet of the growth of “Tap ‘n’ PIN” is nobody has been promoting it, it is just that cardholders and merchants have identified its benefits and changed behaviour accordingly. Tap’n’PIN has a strong but nascent value proposition discovered by the users themselves.
So maybe I need to alter my conference slides and change my own habit of talking about habit forming behaviour!
Lance Blockley, Managing Director – Consulting, RFi Group.
Chart sources: RBA Payment Statistics and HP - RFi Australian Payments research, Marc 2014.