The rise of contactless payments: Or, how Brexit could make it more expensive to go to the loo on holiday

Pass your debit card, would you? Image: Getty.

We’ve all been there: bursting for the toilet and fumbling for coins to get through the barrier and the sweet, sweet relief of the public lav.

Except on this occasion, there is no barrier and you’re staring at a contactless debit card swipe lock on the stall. Because you’re in Norway – and apparently Norwegians no longer believe in cash.

Norway has embraced card payment in a big way. On a recent trip to Bergen and Trondheim I wound up feeling awkward every time I took notes rather than plastic out of my purse (of course I apologised; I was raised in Britain).

On average, each Norwegian pays for something with a card more than once a day; they also use cashpoints far less than UK residents. (This may explain why I struggled to find an ATM, but that’s a different story.)

The Norwegians seemed to find my insistence on paying in cash quaint. Once, I tried to explain foreign transaction card fees to a barman and he looked at me like I was quite mad, so I never did it again.

But charges matter. All UK banks have slightly different policies on how much they charge when you pay with a card overseas. Some charge nothing. Some charge up to 3 per cent of the transaction value. Some charge a percentage and a fixed charge every time: this can be up to £1.50 every time you use your card.

Other cards have a minimum spend. None of these are things I want to calculate when I’m crossing my legs and desperate for a pee.

I’ve written about payment systems in this space before. Japan seems to have got it right: its equivalents of the Oyster card not only integrate with transport systems in other parts of the country but, like contactless, can used for small payments without fees. They’re simple and don’t require head scratching mental arithmetic every time you want to buy a sandwich.

But in most of the developed world, cash is increasingly looking like yesterday’s payment system: you can’t even use it on London buses any more. Some 50 per cent of cards in the UK are now contactless, with 86.5m in circulation, and we use them in 180 million transactions every month – a figure that’s only going to increase. (And no wonder, when it’s so quick to pay for small purchases.)

The other half

Those of you who are maths whizzes will have calculated that if 50 per cent of British cards are contactless, then 50 per cent aren’t. Furthermore, a recent survey by a fraud protection company found that 19 per cent of UK adults don’t think contactless cards are secure and don’t want to use them at all.

That could be bad news for companies making swipe locks for loos – or left luggage lockers, or vending machines, or Transport for London, or any of the other myriad technologies that are relying on us tapping merrily away.

Then again, it could be bad news for the customers who rely on them. After all, companies are increasingly keen to get rid of cash: to remove the need to collect, count and bank physical currency, or the risk it could be stolen, from the system entirely.

(All this begs another question: if the future is payment made by card then, on a personal level, are currencies still relevant? Does it matter that this croissant is priced in pounds, dollars or Azerbaijani manat? It’s just a number that needs to be removed from your bank account. And given that many UK banks justify charges because we’re not paying in sterling… It’s almost enough to convert me to the Euro.)

All this is a very physical manifestation of the more benign aspects of globalisation. Why bother with foreign exchange bureaux when you can simply whip out the same card you use at home?

Well the reason why, obviously, is those charges. A spokesman for the UK Cards Association heavily implied it’s a matter for consumer choice – it’s our responsibility, it seems, to opt for one of the fewer than 10 cards available on the current market with no charges at all.

This is passing the buck. Given that a press officer from my own bank told me “You know, I’d never thought about using contactless abroad”, we clearly still have some way to go on this one. It’s a relatively new phenomenon and one that won’t have crossed many people’s minds until they’re confronted with a locked toilet door and a £1.50-per-transaction charge on the next bank statement.

A preferable option would surely be for banks to work with partners abroad, and start harmonising how we all pay for things. If only there was some kind of international union in which diverse countries could work together to improve the lives of their citizens.


Is Britain’s housing crisis a myth?

Council housing in Lambeth, south London. Image: Getty.

I’ve been banging on about the need for Britain to build more houses for so long that I can no longer remember how or when it started. But at some point over the last few years, the need to build more homes has become My Thing. People ask me to speak at housing events, or @ me into arguments they’re having on Twitter on a Sunday morning in the hope I’ll help them out. You can even buy a me-inspired “Build More Bloody Houses” t-shirt.

It’s thus with trepidation about the damage I’m about to do to my #personal #brand that I ask:

Does Britain actually have enough houses? Is it possible I’ve been wrong all this time?

This question has been niggling away at me for some time. As far back as 2015, certain right-wing economists were publishing blogs claiming that the housing crisis was actually a myth. Generally the people who wrote those have taken similarly reality-resistant positions on all sorts of other things, so I wasn’t too worried.

But then, similar arguments started to appear from more credible sources. And today, the Financial Times published an excellent essay on the subject under the headline: “Hammond’s housebuilding budget fix will not repair market”.

All these articles draw on the data to make similar arguments: that the number of new homes built has consistently been larger than the number of new households; that focusing on new home numbers alone is misleading, and we should look at net supply; and that the real villain of the piece is the financialisation of housing, in which the old and rich have poured capital into housing for investment reasons, thus bidding up prices.

In other words, the data seems to suggest we don’t need to build vast numbers of houses at all. Have I been living a lie?

Well, the people who’ve been making this argument are by and large very clever economists trawling through the data, whereas I, by contrast, am a jumped-up internet troll with a blog. And I’m not dismissing the argument that the housing crisis is not entirely about supply of homes, but also about supply of money: it feels pretty clear to me that financialisation is a big factor in getting us into this mess.

Nonetheless, for three reasons, I stand by my belief that there is housing crisis, that it is in large part one of supply, and consequently that building more houses is still a big part of the solution.

Firstly I’m not sold on some of the data – or rather, on the interpretation of it. “There is no housing crisis!” takes tend to go big on household formation figures, and the fact they’ve consistently run behind dwelling numbers. Well, they would, wouldn’t they? By definition you can’t form a household if you don’t have a house.

So “a household” is not a useful measure. It doesn’t tell you if everyone can afford their own space, or whether they are being forced to bunk up with friends or family. In the latter situation, there is still a housing crisis, whatever the household formation figures say. And there is plenty of anecdotal evidence to suggest that’s the one we’re living in.

In the same way I’m not quite convinced that average rents is a useful number. Sure, it’s reassuring – and surprising – to know they have grown slower than general prices (although not in London). But all that figure tells you is the price being paid: it doesn’t tell you what is being purchased for that payment. A world in which renters each have their own property may have higher rents than one in which everyone gets one room in an over-crowded shared flat. It’s still the latter which better fits the label “housing crisis”.

Secondly, I’m entirely prepared to believe we’ve been building enough homes in this country to meet housing demand in the aggregate: there are parts of the country where housing is still strikingly affordable.

But that’s no use, because we don’t live in an aggregate UK: we live and work in specific places. Housing demand from one city can be met by building in another, because commuting is a thing – but that’s not always great for quality of life, and more to the point there are limits on how far we can realistically take it. It’s little comfort that Barnsley is building more than enough homes, when the shortage is most acute in Oxford.

So: perhaps there is no national housing crisis. That doesn’t mean there is not a housing crisis, in the sense that large numbers of people cannot access affordable housing in a place convenient for their place of work. National targets are not always helpful.

Thirdly, at risk of going all “anecdote trumps data”, the argument that there is no housing crisis – that, even if young people are priced out of buying by low interest rates, we have enough homes, and rents are reasonable – just doesn’t seem to fit with the lived experience reported by basically every millennial I’ve ever met. Witness the gentrification of previously unfashionable areas, or the gradual takeover of council estates by private renters in their 20s. 

A growing share of the population aren’t just whining about being priced out of ownership: they actively feel that housing costs are crushing them. Perhaps that’s because rents have risen relative to wages; perhaps it’s because there’s something that the data isn’t capturing. But either way, that, to me, sounds like a housing crisis.

To come back to our original question – will building more houses make this better?

Well, it depends where. National targets met by building vast numbers of homes in cities that don’t need them probably won’t make a dent in the places where the crisis is felt. But I still struggle to see how building more homes in, say, Oxford wouldn’t improve the lot of those at the sharp end there: either bringing rents down, or meaning you get more for your money.

There is a housing crisis. It is not a myth. Building more houses may not be sufficient to solve it – but that doesn’t meant it isn’t necessary.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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