Contactless cards win over users, but struggle to reach the mainstream

Contactless cards win over users, but struggle to reach the mainstream

Despite the fact that over 90% of Americans that own contactless payments cards like using them, three quarters of the population are not even aware of the technology's existence, according to a survey commissioned by the Smart Card Alliance.

Javelin Strategy and Research surveyed 500 contactless card users, finding that 92% think the technology is fast and easy to use. Respondents also use their cards regularly - with over 22% making payments with their contactless cards more than six times per month.

Contactless card users are also keen on mobile payments. The research found 43% are likely to use a handset as a mobile wallet, compared to just 19% of people who don't use contactless cards.

Nearly half - 47% - of contactless card owners would even switch carriers in order to make mobile payments.

The technology is rapidly gaining in popularity, with nine percent of the US population now possessing a contactless card. Last year the number of open network contactless cards in circulation reached 35 million, nearly double the 19 million in 2006.

Merchants are also adopting the technology, with an estimated 75,000, including taxi firms and transport operators as well as retailers, now accepting the cards.

"Contactless payment acceptance at merchants is taking off much faster than PIN debit did," says John Suchanec, SVP, 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."

But Javelin also questioned 1500 people representative of the US online population (not necessarily contactless card users) and found awareness of the technology is still poor.

Only a quarter of those surveyed are familiar with contactless, although this is up from 15% in 2006.

Randy Vanderhoof, executive director, Smart Card Alliance, says: "Communicating and building awareness of contactless benefits to get consumers to try it is critical, and an important priority for all of the stakeholders."

The positive reaction to contactless payments in the US echoes results of surveys in the UK and France.

A pilot scheme that allows Londoners to use their mobile phones to pay for tube journeys and make small value purchases found that nine out of ten participants were happy using NFC technology on a mobile phone and 78% said they would be interested in using contactless services if available.

A similar pilot launched by a consortium of French banks, telcos and technology vendors last year recently reported customer satisfaction rates of above 90%.

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