Hi Martin,
I’ve had a look on the TfL site and it doesn’t mention any further charge to add the discount. However, it does seem to assume that you’ve already got the Oyster card. It is just possible that you do have to add credit before you can set the discount flag. I’ll try and find out.
With the improved daily and weekly capping on Oyster you could now switch to using your Oyster card rather than contactless.