What Does Subway's Contactless Trial Mean For Payment?

Subway, the 31,000-store sandwich restaurant chain, has agreed to be the latest guinea pig for Visa's contactless payment program. Subway confirmed Thursday (April 30) that it will soon make the payment technology available to "participating" locations in Canada. Subway has about 2,400 stores in Canada, many of which are franchised.

Typically, statements announcing such deals (which, in this case, included Subway's acquirer for its stores in Canada, Chase Paymentech) feature a canned quote from an executive with the chain, praising the vendor for their wisdom. In this case, the quote provided by Subway was anything but warm. The statement from Marina O'Rourke, the chain's director of retail technology, decidedly said nothing good about contactless, beyond that the chain is willing to see whether it works. "We are looking forward to the opportunity to understand the impact of contactless on speed of service as well as understanding how many of our customers take advantage of this payment method," O'Rourke's statement said, in its entirety.

Contactless is an impressive technology, but O'Rourke is right to be cautious. The trials that have been less than enthusiastic for contactless have had little to do with the robustness of the technology. It's simply the lack of interest among consumers.

For quite a few years, American consumers couldn't have cared less about which manufacturer's CPU was in their laptop or PC. They cared about the hardware brand (IBM, Dell, Apple, etc.) but consumers had few thoughts beyond that. A huge marketing campaign by Intel got consumers juiced and caused the unthinkable to happen. Consumers actually walked into computer stores seeking Pentium PCs, regardless of the computer brand.

If Intel could make a CPU that compelling, why couldn't Visa do the same for contactless payment? Until someone does that, these trials have huge obstacles. What's the benefit for consumers? It's different behavior, which requires a compelling incentive. Are products cheaper if purchased by contactless? Are the warranties better?

The only half-hearted argument that's been made is that it's more convenient, but is it really? Does it really take that much more time to remove a credit card from a purse and wallet and swipe it as opposed to waiving it?

Subway, which has been out in front of technology trends more often than not, is a chain to be watched and to be taken very seriously. Still, one has to wonder, how seriously is Visa itself taking contactless payment?