MasterCard is looking to expand its deployment of contactless payment cards beyond Orlando, Florida, and Dallas, Texas, after initial trial results indicate consumer and retailer benefits in speed and convenience.
More than 16,000 cardholders and 60 retail locations participated in the nine month Orlando trial of MasterCard's PayPass contactless payments card. In some locations, says MasterCard, PayPass reduced purchase times so substantially as to have a tangible impact on retailers' ability to support additional transactions - particularly in the drive-thru environment which shaved between 12-18 seconds off the purchase time as compared to cash.
Earlier this year, MasterCard began working with Nokia in Dallas to test the use of PayPass technology in mobile phones. Here, the average PayPass payment made using a mobile phone was six seconds faster than using a card, due to the reduction of "fumble time", and PayPass payments matched "nearest bill payment" as the quickest way to pay instore at Dallas retailers.
For issuers, PayPass opened up new acceptance locations, enabling cardholders to use cards where they previously relied on cash. In Orlando, says MasterCard, PayPass prompted occasional card users to use their cards more frequently, while some issuers reported positive gains in monthly transaction volume, total spending and frequency of use.
Last month, MasterCard commissioned a national telephone survey which showed that nearly half of consumers carry $20 or less in their wallet, while 86% want to use cash less often than they currently do. MasterCard says these survey results are in line with 2002 studies which showed that 53% of consumers would use PayPass to replace cash payments if their banks offered it to them.
The card organisation says it is proceeding with plans for PayPass deployments in additional locations "that meet the requirements of issuers, retailers and the growing base of contactless payment suppliers and partners".
In a seperate initiative, MasterCard has introduced rePower, a payment mechanism that provides cardholders with a new way to reload a pre-paid or stored-value account using their debit or credit card. Initially, rePower will enable cardholders to reload their pre-paid mobile phone accounts. In the future, MasterCard plans to expand the service to the replenishment of gift cards, pre-paid MasterCard cards, and stored value accounts such as transit and tolls.
In the US, Chase will be the first bank offering MasterCard rePower to their cardholders who purchase pre-paid airtime for their Cingular phones. Additional issuers and network operators will be added to the service in the coming months.
In South Africa, rePower is being used by consumers and merchants to purchase pre-paid airtime from the regions' three major providers of cell phone service for a variety of uses, such as pre-paid mobile phones and payphones.