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Contactless Mobile Payments

We’re looking at how mobile phones are used to make payments. Find out more

Paying for things in shops by simply holding your mobile phone against a reader is becoming more common. Payments like these are known as contactless mobile payments, and their use is expected to increase further in the UK. We expect this to happen as:

  • more people start using contactless mobile payments
  • there are more contactless-enabled point-of-sale terminals
  • more retailers accept higher values of contactless mobile payments (sums over £30) 

This rapid growth could affect all three of our statutory objectives – to promote competition, innovation and the interests of the people and organisations that use payment systems.

To make sure our understanding of the sector is up to date, we asked for information from key stakeholders through a ‘Call for Information’ last year.

What are contactless mobile payments?

Mobile payments are payments which are initiated, transmitted or confirmed on a mobile phone or device. This can apply to online or offline purchases of services and digital or physical goods. 

There are two broad categories of mobile payments: 

  • ‘remote payments’, which mostly take place through the internet 
  • ‘proximity payments’, which generally take place directly at the point of sale

Contactless mobile payments are proximity payments where the phone or device is held near a reader module at the point of sale (for example, in a shop or on public transport). They require specifically equipped smart mobile devices which the readers can recognise.

What have we done so far? 

We issued information requests to a wide range of selected participants in the contactless mobile payments sector in September 2016, using our powers under the Financial Services (Banking Reform) Act 2013. This followed an initial engagement with the relevant stakeholders where we requested their comments on our draft information request. We are now analysing the responses. 

What will we do next?

We are considering how best to deepen or clarify our understanding of any issues, including filling any gaps in our knowledge. As part of this work, we expect to re-engage with stakeholders in the coming months. We expect to publish a progress update in autumn 2017 and will keep this webpage updated as our work develops.