£80m-worth of charitable donations are lost annually because it wasn’t possible to donate with a credit card. How is the evolution of contactless donations shaping the future of charitable giving? Fundraiser editor Jenny Daw investigates
We are rapidly marching towards a cashless world. Research by Barclaycard, published in March, showed that in 2016 contactless payments grew 166%, with over half of British citizens claiming to make a contactless payment at least once a month.
Predictions have been made that by 2025, only 27% of all payments will be made with cash, compared to 45% now.
We’ve already seen that the decreasing prevalence of cash is having an impact on charitable donations. Barclaycard’s research showed that 15% of people will admit to walking away from an opportunity to donate to a charity because it wasn’t possible to donate with a credit card. That almost equates to £80m-worth in donations disappearing each year, simply because people didn’t factor in using any cash that day.
Contactless donation boxes
In September last year, Barclaycard ran a trial of contactless donation boxes, using technology that allows people to donate to a charity just by tapping their contactless credit cards on specially made donation boxes. The bank worked in partnership with several charities including Barnardo’s, the NSPCC and the Royal British Legion. The scheme entailed collectors roaming with collection boxes at special events, as well as collection boxes being placed at checkouts in charity shops.
As well as the contactless option, the boxes also contain a keypad to allow chip and pin payments – in case a donor wishes to give more than the £30 limit currently set for contactless payments. A wise move, as during the trial a £1k donation was given to the NSPCC.
In the three months the trail was running, the participating charities took more than £20k in donations, and donors reported positive reactions to both the ease and the flexibility of the boxes.
Barnardo’s’ chief executive, Javed Khan, said:
“Contactless payments are an easy and secure way for people to give. We are trialing contactless devices but are confident this way of donating and other modern payment methods will make it simpler and quicker for a new generation of givers. Now it takes just seconds for generous donors to help us improve the lives of the UK’s most disadvantaged children and young people.”
Giving people options
Lynette Brooks, head of development at The Barbican, was impressed with the results from the centre’s first contactless donation terminal in its free exhibition space, The Curve. She said:
“The Barbican Centre introduced contactless donations in September last year and we’ve been really pleased with the response so far. Upon entering an exhibition, visitors are invited to donate by our gallery invigilators with a suggested donation of £2. To date, we have raised more than £6k of vital funds for our world-class arts and learning programme, and are now planning on installing more contactless donation points in locations with high footfall.
“In terms of what we have learnt so far, we have found that people are more likely to donate when they are engaged through face-to-face interactions, and that it still pays to give people options – for example, having cash and contactless donation points together. Recent audience research has shown that around 60 per cent of our visitors carry a contactless card, and so it is very likely that contactless donations will be a part of Barbican fundraising activity for many years to come.”
Wearable card readers
In March 2017, meanwhile, following its successful trial of contactless donations in May last year, Blue Cross rolled out its Tap Dogs campaign nationwide. PayPal provided the technology, with the payments giant funding a range of new contactless dog coats complete with PayPal Here card readers.
Matthew Cull, deputy director of fundraising at the charity, said:
“Blue Cross has had a fantastic response to our Tap Dogs initiative, which seems to be going from strength to strength. Its beauty lies in its simplicity. Using specially designed coats worn by trained dogs, donors can make contactless donations while meeting the dog and their owner. Members of the public have reacted really positively to interacting with the dogs and volunteers.
“Tap Dogs have really captured the imagination of the public, charities and the media. We also keep the amount donated deliberately low – just £2 so donors feel very comfortable throughout the entire experience.”
Matthew says it’s still early days in terms of how the sector can maximise the opportunities that contactless payment technology brings. But, he says, “as payment mechanisms become more sophisticated for shoppers, then so must charities become more sophisticated in responding to change and offering ways for donors to give.
“Charities must always look at how they interact with their donors and how they try and appeal to new supporters. The world is moving faster every day and appealing to new people must be fun. Charities need to develop ways to enable people to donate in a quick and safe manner.”
Finding the sweet spot
The sector’s relationship with contactless payment technology is still very much at the experimental stage. Paul Vanags, fundraising director of People and Planet, blogger at www.thinkingfundraising.com, and former head of public fundraising at Oxfam, says:
“Contactless payments are very attractive to fundraisers as they lower a barrier to donating by offering speed and convenience to a transaction. The rapidly rising ubiquity of contactless technology makes it comfortable and familiar to the public, and as a result many charities are experimenting with them. This is important, and I’m sure contactless will be a part of the future of fundraising, though it still feels like most people are trying to work out where it will add most value.”
As with any new technology, the theory and the practice often play out differently. Oxfam trialled contactless as an alternative to cash in buckets for emergency appeals, and found that relatively few people used the contactless technology.
“From a supporter point of view the replacement of ‘chucking a some loose change’ into a bucket is replaced by a different set of physical and psychological actions”, Paul explains. “We all put money into different mental ‘pots’ and treat it differently as a result – even a pound, whether it sits in my pocket or in my bank account. However, we are all predictably irrational and the loose change in our pockets, psychologically at least, has less value to us than the money in our bank accounts that we use to buy our food, pay our rent and so on. Getting out our purse or wallet, finding a bank card, paying £5 rather than the £1.27 I have in change, all of these things create a much bigger barrier to that contactless transaction.
“Given the fact that chucking change in a bucket is pretty fast and convenient in the first place, you can start to understand why, in this instance, contactless confers no benefit and in actual fact is arguably a worse choice for the fundraiser.
“For other applications fundraisers also need to remember that contactless does not give data, such a valuable part of any transaction, particularly with GDPR etc, so we need to be choiceful where we use it. My advice would be test, test, test – I’m sure contactless will be a valuable tool, we just need to find the right place for it.”
Coupling old with new
Testing is indeed the name of the game. And it's not just Barclaycard and PayPal who are coming up with ways to use near-field payment technology; Angal,a company that makes charity collection boxes, has teamed up with digital company Thyngs to offer a solution to upgrading existing cash donation boxes so that they also incorporate near-field technology. This coupling of old and new could offer a good workable solution in this transitional era, in which the varying preferences for cash vs digital giving need accommodating if charities want to maximise their income from collections.
And more and more charities are embracing contactless payment technology. Just last month, for example, electronic contactless donation points were set up in Bristol for citizens to make a £2 donation to homeless shelters.
What’s clear in all of this is that the way we spend and transfer cash is changing rapidly. In the not-too-distant future, blockchain technology and bitcoin micropayments will almost certainly power more and more giving. But that’s another article...
In the meantime, one thing remains certain: the easier it is for someone to give to your cause, the more likely they are to do so.
Jenny Daw is editor of The Fundraiser