The number of contactless credit and debit cards in circulation in the US is set to increase from 27 million in 2006 to 109 million in 2011, according to research by market intelligence firm Packaged Facts.
Total purchase volume in the US with contactless payment cards neared an estimated $15 billion in 2006 - registering a compound annual growth rate (CAGR) of some 700% from 2004 to 2006.
Packaged Facts says the number of contactless transactions will rise from 777 million in 2006 to a massive 2.2 billion by 2011. This increase will be driven by retailers who are under pressure to serve customers more efficiently and card brands pushing further into the contactless payments market.
MasterCard and Visa have been heavily promoting the use of contactless payment technology for low-value transactions that have been traditionally made with cash.
"Card issuers are rapidly expanding their market presence in contactless payments and the percentage of retailers having contactless payment systems is expected to nearly triple within two years," says Tatjana Meerman, managing editor of Packaged Facts. "Increasing consumer awareness of the technological, safety, and convenience factors inherent in smart cards will only serve to make penetrating the consumer market much easier in the coming years."
Research released in January by US-based Aberdeen Group found that contactless payment systems are approaching the tipping point of adoption in the retail markets, with over half (58%) of retailers planning to implement the technology within the next two years.