Barclays BPay: A Giant Leap forward or a Small Step?

Oct 9, 2014
Posted by: David

So I got my new UK Barclays BPay wristband and off I went using it. Setting up the auto top up was easy and with a bit of researching it was also easy to set up it up on the TFL contactless site. I have had a great reaction to using it from ‘WOW’ in Boots, to ‘That’s Cool in WH Smith’ and even a ‘Not seen one of those before’ from the TFL guy promoting contactless at the station. So yes it works and works well, with my TFL statement I now don’t even bother carrying my Oyster Card any more.

As for the design, well it does rather look like a prison tagging system, a great big lump of black rubber around my wrist and you do have to wonder why given that the you have been able to get watches you put an NFC chip into and make payments with for several years and the chips on these are half the size why it is big. But this is early days and one must assume it will reduce in size quickly.

However it does bring us to the crux of this blog, is it a ‘Giant Leap Forward or a Small Step’; as I have just stated you could buy a watch and put a contactless card in it for a few years now, we have seen as per the case studies below contactless wristbands used at Festivals for also several years. On that basis it could be argued that BPay is just an evolution, if even that; a small step.

But I would argue it is more than that, it is a giant leap forward” watch, what is that for I have my phone”; is as much a piece of jewellery, a fashion statement as it is a device you wear to tell the time. Many people thus have more than one watch, will they be persuaded to drop all their other watches in favour of an Apple or other watch that allows you to pay using it.

Maybe Apple lovers will drop all their other watches but for the general public I do not believe so, thus what you have with the BPay wristband is a generic, non-fashion item for payment. It is in effect the start of what we may see as the beginnings of a mass market wearable payment technology range of goods – of course ideally we would able to swap the NFC chip from one wearable device to another quickly and easily.

Unlike my phone, it works all the time; the battery never dies on me. Unlike my phone I can wear it when I swim. It is great when cycling and working out, it means I can always have access to payments whenever and wherever I am. We have seen BPay look to roll this out to include access control with Southampton Football Club – they get a nicer branded orange one - and I expect we will see many more implementations of combined payment, access control wristbands look to roll out in the near future.

The business model I am sure has yet to be fine-tuned, at the moment I load it using my premium credit card circa 180 basis points interchange cost to Barclays and Barclays make circa 70 basis points on usage as it is MasterCard prepaid card so economically I am not very good for them. Would I pay for it, not sure, convenience yes, enough to pay to use maybe. But hats off to Barclays, at least they have something in the market, I hope others follow.

Case Study 1: June 2011 Isle of Wight Music Festival

  • Festival goers in the VIP arena were given the wristbands
  • These provided access control and payment functionality
  • Pre-loaded with £30, the wristbands could be used to purchase food and drink with a simple tap of the wrist
  • Festival-goers quizzed on the experience, said:
    • 96% - they were quicker
    • 98% - easier to use than credit or debit cards,
    • 100% - want to use the PayPass prepaid wristbands again to pay at other festivals, concerts and sporting events

Case Study 2: Four major Hungarian festivals, Budai Gourmet, VOLT festival, Heineken Balaton Sound and Sziget festival

  • Organized by Sziget Ltd. banned cash, and made Metapay’s contactless plastic their official currency.

Key Stats

  • Operated up to 34 Top up points in parallel (4 cashiers in each) 0-24 non-stop for 10 days.
  • Served 310.000 visitors
  • 4.500.000 succesfull transactions handled
  • With a peak of 16 transactions / sec (for a daily 1.5 hours).
  • 1280 POS terminals installed, monitored and supported 0-24, in Sziget festival alone
  • Extra sales in our top-up points (RFID public transport tickets, watches with built in RFID Festivalcard)
  • For the 2011 Sziget festival teamed up with Vodafone Hungary to introduce the first mobile based NFC pilot in Hungary. 200 testers were asked to join and try the Festivalcard function, built into Vodafone smartphones.
  • 96% of the visitors and 87% of the merchants were pleased with the cashless payment (survey base: 1.132 visitors and 100% of the merchants)