Smart Card Alliance’s Smart Card Talk, December 2006 • Volume 11 Number 12
Since mid-2005, leading financial issuers have put over 17 million contactless payment devices into the hands of U.S. consumers. That number is expected to grow significantly by the end of 2006. Financial institutions that have announced programs to provide consumers with contactless credit and debit cards or key fobs that contain a contactless chip include American Express, Bank of America, Citibank, Citizens Bank, GE Consumer Finance, HSBC Bank, JPMorgan Chase, KeyBank, US Bank and Wells Fargo.
So far, the introduction of contactless payment has focused on markets in which transactions are typically of lower value, where consumers pay primarily with cash, and where speed and convenience are critical. The over 35,000 merchant locations in the United States that now accept contactless payments include quick service restaurants, convenience stores, pharmacies, theaters, and sports venues.
An independent survey of consumer attitudes toward contactless payment devices, commissioned by the Smart Card Alliance and conducted by Javelin Strategy & Research in August, 2006, indicates that there is a large, untapped market for the use of these devices. This article describes the results of the survey and the implications of these results for financial institutions contemplating adoption of a contactless payment option.