Contactless Payment Doubles Growth
After two years of fast growth in contactless payments, the verdict is in: once consumers try contactless, they like it. New U.S. consumer research indicates that nine percent of the U.S. population now has a contactless credit or debit card. Last year the number of open network contactless cards in circulation reached $35 million in 2007, nearly doubling from $19 million in 2006.
A survey from the Smart Card Alliance showed 92 percent of contactless users thought it was both fast and easy. On the whole, these users had positive experiences at merchants too, reporting that 85 percent of cashiers knew how to accept contactless, and 84 percent saw contactless acceptance marks at the point-of-sale. Contactless users also are paying with their contactless cards frequently, with over 22 percent using contactless payment more than six times per month.
One challenge highlighted by the recent Alliance consumer study was that more communication is needed to reach more consumers. Awareness has grown significantly since 2006, with 25 percent of consumers surveyed now familiar with contactless payments compared to 15 percent in 2006; however, more than 50 percent of consumers still are not familiar with contactless payments. Even in high penetration zip codes nearly half of all consumers are unfamiliar with contactless.
Retail acceptance of contactless is also strong and growing. There are now 75,000 U.S. retail locations accepting contactless payment, including taxi cabs and transit operators, according to David Robertson, publisher of The Nilson Report, a trade newsletter that tracks the payment industry.
"Contactless payment acceptance at merchants is taking off much faster than PIN debit did," says John Suchanec, senior vice president of payment research and innovations, Bank of America. "Contactless acceptance is already growing at a rate that it took seven years to achieve with PIN debit. Mobile will accelerate the curve."
Contactless users are very positive on mobile payments as well. Current contactless users are twice as likely to use a mobile wallet as non-users. The Alliance research showed 43 percent of contactless users were likely to use a mobile device as a mobile wallet, compared to 19 percent of the non-users. Consumers are even ready to switch carriers to get what they want, with 47 percent of contactless users saying that they would switch mobile carriers to gain mobile payments.
A survey from the Smart Card Alliance showed 92 percent of contactless users thought it was both fast and easy. On the whole, these users had positive experiences at merchants too, reporting that 85 percent of cashiers knew how to accept contactless, and 84 percent saw contactless acceptance marks at the point-of-sale. Contactless users also are paying with their contactless cards frequently, with over 22 percent using contactless payment more than six times per month.
One challenge highlighted by the recent Alliance consumer study was that more communication is needed to reach more consumers. Awareness has grown significantly since 2006, with 25 percent of consumers surveyed now familiar with contactless payments compared to 15 percent in 2006; however, more than 50 percent of consumers still are not familiar with contactless payments. Even in high penetration zip codes nearly half of all consumers are unfamiliar with contactless.
Retail acceptance of contactless is also strong and growing. There are now 75,000 U.S. retail locations accepting contactless payment, including taxi cabs and transit operators, according to David Robertson, publisher of The Nilson Report, a trade newsletter that tracks the payment industry.
"Contactless payment acceptance at merchants is taking off much faster than PIN debit did," says John Suchanec, senior vice president of payment research and innovations, Bank of America. "Contactless acceptance is already growing at a rate that it took seven years to achieve with PIN debit. Mobile will accelerate the curve."
Contactless users are very positive on mobile payments as well. Current contactless users are twice as likely to use a mobile wallet as non-users. The Alliance research showed 43 percent of contactless users were likely to use a mobile device as a mobile wallet, compared to 19 percent of the non-users. Consumers are even ready to switch carriers to get what they want, with 47 percent of contactless users saying that they would switch mobile carriers to gain mobile payments.