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The move to contactless payments is gaining momentum. Consumers have a strong preference for such technology and merchants are using contactless payments to reduce waiting times, satisfy customers and boost sales.
Across the United States, a major awakening is occurring among consumers. Millions of Americans are now discovering that their new or reissued credit and debit cards (along with other form factors like key fobs and stickers) have an innovative feature: They are contactless-enabled.Using this technology at the point of sale, consumers can pay without swiping their cards through magnetic readers, handing over their cards to the clerk, signing their names or entering their PINs. For consumers, this means a faster checkout and a reduced reliance on cash. (Plus, they appear to enjoy simply waving a contactless payment device and paying without ever touching the pad or stylus needed for contact transactions.)
At checkout lanes with specially equipped readers, consumers with a contactless-enabled card can choose how to pay. They can use the conventional payment card contact process, which usually involves handing their card to a clerk, who swipes it and prints a receipt to sign. Or they can save time by simply waving the card
within close proximity to a contactless-enabled reader to finalize the transaction in one efficient step. Fast, secure contactless payments are appealing to merchants, too. The technology gives retailers a way to encourage more frequent visits by customers who prefer this payment method, as well as to potentially speed up transactions and reduce operational costs. Evidence from various pilot programs shows overwhelmingly that once consumers have tried contactless payments, they have a strong preference for this method. As the move toward contactless gains momentum, more consumers will be trying—and appreciating—the speed and convenience of contactless payments, and they will remember which stores give them this option. As a result, those merchants are well positioned to increase revenue in three ways:
This paper summarizes the current market landscape for contactless payments and attempts to provide answers to some important questions. Do consumers, in fact, truly value the contactless payment option? Has the technology been slow to gain acceptance? Has the recession derailed the technology’s future growth? Why should merchants consider investing in contactless now instead of later?
Read the entire paper here.