The Wiki Man

How contactless cards will change the world (much more than you think)

Painless payment is a peerless consumerist mind-hack, and it could transform the traditional British pub

30 January 2016

9:00 AM

30 January 2016

9:00 AM

I am one of those annoying, mildly claustrophobic people who sit at the end of a row in cinemas. There are plenty of things in life — films, plays, social events — which I can only fully enjoy knowing I can make a sharp exit at any time. It’s not that I leave: I just like to know I can. My idea of hell is a party on a boat.

So I am rather enamoured with the new mobile-phone app Qkr, which lets you pay with your phone in some restaurants without waiting for the bill. It’s the honest man’s version of ‘doing a runner’. You check in on your phone, give a four-digit code to the waiter or waitress, and then you are free to order extra items and settle up on your screen. This creates a perfect ‘third way’ between a restaurant and a fast-food outlet.

(The only slight downside of this technology is that my children ingeniously discovered that I now no longer need to be physically present in Wagamama to pay for their food. I recently paid for a mini chicken ramen in Sevenoaks from a hotel room in Athens, thereby fulfilling the teenager’s fantasy of the perfect dad — someone who pays for things while being as far away as possible.)

I have long believed that new payment technologies have much more effect on people’s economic behaviour than we expect. In many ways the credit card is the greatest consumerist mind-hack ever invented (if I had to pay for my holidays in cash, I would go to Pontins every year — in February). What you buy is surprisingly dependent on how you pay for it. So I duly predict that the new contactless payment cards will change behaviour more than we think.

Small transactions which are annoying as much for their hassle as for their expense (paying to use loos in stations, for instance) should be easier. Queues at coffee shops will shorten. But I suspect there is a subconscious appeal to contactless payment connected to the psychological idea of ‘flow’. Boarding a London bus feels decidedly less uncool now that you — and, more important, the people in front of you — no longer fumble with cash. Eventually, contactless cards will be able to replace paper tickets — not only on trains but at theatres and cinemas.

I also wonder whether the contactless card can help rescue the British pub. I don’t want to scandalise traditionalists, but the current system of buying drinks at the bar, along with the ‘round’ system, really dates back to a time of immovable tills and cash-only payment. A simple, portable payment device would allow table-service (once commonplace in British pubs, and surviving in Manchester and Liverpool until the 1960s) to stage a comeback, and make it easy for people to split the cost of a round. It would save you repeatedly having to return to the bar, which is usually thronged by a pub’s most misanthropic regulars or, in London, by a bunch of people planning a bank-job with the landlord.

Better still for ill-paid pub workers, it might allow tipping to make a comeback. Unusually for a Brit, I am quite in favour of tipping. In any transaction, it is the discretionary part that carries by far the most information. Meaning is overwhelmingly conveyed not by what you do, but by the things you do beyond what you’re obliged to do.

Some people don’t buy this. They claim that although service in the United States appears to be good, it is ‘really just insincere’, since people who appear to be friendly are merely chasing tips. But good customer service is a bit like sex for young men: you don’t really care what the motivation is just so long as you get some.

Got something to add? Join the discussion and comment below.

Rory Sutherland is vice-chairman of Ogilvy Group UK.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments
  • davidshort10

    I can remember a room in one of the pubs near our house in the North East in the 70s where people sat at a table and were served there. There were bells on the wall to push for service. I think it was designed for people who came to the pub with their wives. Also, I always thought the round system developed in the UK because it was illegal to buy alcohol on credit.

    • rorysutherland

      I wondered about this. Certainly the order-at-the-bar thing is not as old as we think: large London pubs historically had a lot of small rooms or partitioned areas, and those not adjacent to part of the bar would have had a bell system for ordering.

      I met Heineken’s UK chief barman once: he is a former landlord who is the in-house guru on all bar-related matters. I tentatively mentioned bringing back table-service half expecting him to be outraged: no. “I’ve been saying this for years,” he said.

    • NorthernGrouse

      The Blackbird in Ponteland,maybe….

    • Mr B J Mann

      I’m sure I can remember a few pubs in Liverpool in the late 70’s still doing it!

  • Copyright101

    The bankers would like nothing more than getting rid of cash altogether. Bit by bit the bricks are being put in place.

    “It’s convenient.”

    “It helps pubs.”

    “Its more secure.”

  • john p woods

    Nice end line.

  • Bruce Fielding

    Money has been a concept since we stopped bartering and replaced it with coinage. The only difference now is that it has moved from physical to virtual, so our worth is measured and amassed by algorithms. It would be interesting if the currency changed from the once-removed ‘money’ to one based on time worked, call it ‘effort’. How much of time paid for your efforts would you lay out for a pint? Or a pair of trousers? Or a car? Maybe there’s an app for that…

    • Ade

      Become self-employed, and charge by the hour; you’ll soon know…

    • Alex

      There’s another difference: that virtual money means private banks can create it more or less at will. In 1981 Thatcher abolished the prior agreement between the banks and the BoE of a 1.5% reserve requirement and had banks draw up individual contracts with the BoE. From 1981 to 2009 the reserves were an order of magnitude less even than that, and now banks do not even need to draw up a contract laying out what reserve requirement they are going to have.

      • rtj1211

        There are now ways to avoid borrowing from ‘banks’. It’s called crowd funding.

        Banks will be wiped off the face of the earth within a generation as all self-regarding people borrow from each other. The banks will be disintermediated and it will serve them all right.

        • Alex

          Ultimately institutions backed by the state (that is, too big to fail) are far less risky investments. We trade freedom for safety.

          Also crowd funders have a 100% reserve requirement. That makes it far harder to raise capital and thus nobody has the money to see through any projects so the economy and technological progress don’t grow as fast. It would be even more inadequate than the gold standard.

          The velocity of knowledge sharing since mass communications happened basically means that we have too many ideas too quickly and not enough money to do them. Thus the move to fiat currency and fractional reserve banking was fundamentally a good idea in my view but not to the ridiculous extremes we have these days.

    • rtj1211

      You can still barter with coinage. It’s called negotiating the price. It’s only in retail stores where you delude yourself that the price is non-negotiable. Buying windows? The price is negotiable. Buying air flights? The price is negotiable. Buying houses? The price is negotiable.

      Bartering is stll alive and well. It’s just not alive and well at Tescos or Waitrose.

      Perhaps a visit to an oriental market with some renmimbi in your hands will teach you that you can still barter with cash?

  • peterpiper

    Bankers want rid of cash for one very simple reason, and, as usual it has nothing to do with the consumers interest. As we now move to the inevitable “negative interest rates” (surely the classic oxymoron), the ability to remove your cash from the banks, and stick it under your bed will leave them bereft of the ability to gouge you!

    This will be sold to the numpties as a streamlining of their lives.

    • stuartMilan

      perhaps “negative interest rates” could be rephrased simply as “boredom rates”?

  • Michael H Kenyon

    When the money game changes, it’s not for our benefit. I have no intention of adopting these gimmicks more than I have to.

  • Roger Hudson

    I keep my new bank card well wrapped in Turkey thick aluminium foil, no radio wave stuff for me.
    Don’t you remember the old word ‘swipe’ meant ‘to steal’.
    They will wan’t to abolish cash so governments can inflate the money supply at the push of a button .

    • Todd Unctious

      Totally agree. We have been told we cannot live without mobile phones. But I have managed perfectly well. Now we have digital by default government services, which mean no service. Contactless cards are a dopey gimmick that only benefit the banks. Cash is King.