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Contactless payment: thumbs up from American consumers
TECHNOLOGY TECHNOLOG Y
www.smartcards-today.com
ISSN 0965-2590 October 2008
contactless
Contactless payment: thumbs up from American consumers
A
fter two years of fast growth in the US contactless payment market, new research shows that once consumers try it, they like it. Meanwhile, with large US issuers including American Express, Chase, Citibank, Washington Mutual, Wells Fargo and many others issuing contactless cards, the number of users is growing fast. The US consumer research commissioned by the Smart Card Alliance showed nine percent of the US population now has a contactless credit or debit card. Last year the number of open network contactless cards in circulation reached 35 million in 2007, nearly doubling from 19 million in 2006, according to another study from Jupiter Research. The Alliance survey showed 92 percent of contactless users thought it was both fast and easy. On the whole, these users had positive experiences at merchants too, reporting that 85 percent of cashiers knew how to accept contactless, and 84 percent saw contactless acceptance marks at the point-of-sale. Contactless users are also paying with their contactless cards or fobs frequently, with over 22 percent using contactless payment more than six times per month. The Alliance survey, conducted in 2008 by Javelin Strategy and Research, included two pools of respondents: 1500 respondents that are representative of the US online population,
TODAY
card
which is 73 percent of the US population, and 500 contactless credit/debit card users. One challenge highlighted by the recent Alliance consumer study was that more communication is needed to reach more consumers. Awareness has grown significantly since 2006, with 25 percent of consumers surveyed now familiar with contactless payments compared to 15 percent in 2006; however, more than 50 percent of consumers still are not familiar with contactless payments. Even in high penetration zip codes nearly half of all consumers are unfamiliar with contactless. Merchant acceptance of contactless is also strong and growing. There are now 75 000 US merchant locations accepting contactless payment, including taxi cabs and transit operators, according to David Robertson, publisher of The Nilson Report, a trade newsletter that tracks the payment industry. Contactless users are very positive on mobile payments as well, according to the research. Current contactless users are twice as likely to use a mobile wallet as non-users. The Alliance research showed 43 percent of contactless users were likely to use a mobile device as a mobile wallet, compared to 19 percent of the nonusers. Consumers are even ready to switch carriers to get what they want, with 47 percent of contactless users saying that they would switch mobile carriers to gain mobile payments.
Contents NEWS Contactless payment: thumbs up from American consumers
1
Credit crunch forces ID Data sale
1
Cryptography Research nails down more licensees
3
Visa payWave spreads to Switzerland
3
BART riders embrace mobile phone payment
4
Second generation ePassports put through their paces
5
New York and Michigan driving licences awarded
5
UK ID card takes next steps
6
HID Global to converge physical and logical access
7
BIOMETRIC BYTES Breaking news from the Biometrics Industry
8
CHIP TALK An innovative approach to fraud management
9
FEATURES Electronic payment: powering West Africa
10
SCM Microsystems focuses on contactless
12
ID document personalisation
13
SURVEY More than a talking shop…
13
company news
Credit crunch forces ID Data sale
I
D Data Group plc, a highly-respected UK-based smart card and card solutions group, has announced that its core business unit – ID Data Ltd – is appointing an administrator to protect it from creditors. The company had previously announced that it was seeking funds from investors and, in
parallel, pursuing the possible sale of its operating businesses in order to meet its short term working capital and debt funding requirements. (According to media sources, ID Data is being threatened with a winding up order by the Inland Continued on page 3...
REGULARS News Extra News In Brief Events Calendar Viewpoint
2 3–7 7 16
ISSN 0965-2590/08 © 2008 Elsevier Ltd. All rights reserved This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.
www.smartcards-today.com
ISSN 0965-2590 October 2008
contactless
Contactless payment: thumbs up from American consumers
A
fter two years of fast growth in the US contactless payment market, new research shows that once consumers try it, they like it. Meanwhile, with large US issuers including American Express, Chase, Citibank, Washington Mutual, Wells Fargo and many others issuing contactless cards, the number of users is growing fast. The US consumer research commissioned by the Smart Card Alliance showed nine percent of the US population now has a contactless credit or debit card. Last year the number of open network contactless cards in circulation reached 35 million in 2007, nearly doubling from 19 million in 2006, according to another study from Jupiter Research. The Alliance survey showed 92 percent of contactless users thought it was both fast and easy. On the whole, these users had positive experiences at merchants too, reporting that 85 percent of cashiers knew how to accept contactless, and 84 percent saw contactless acceptance marks at the point-of-sale. Contactless users are also paying with their contactless cards or fobs frequently, with over 22 percent using contactless payment more than six times per month. The Alliance survey, conducted in 2008 by Javelin Strategy and Research, included two pools of respondents: 1500 respondents that are representative of the US online population,
TODAY
card
which is 73 percent of the US population, and 500 contactless credit/debit card users. One challenge highlighted by the recent Alliance consumer study was that more communication is needed to reach more consumers. Awareness has grown significantly since 2006, with 25 percent of consumers surveyed now familiar with contactless payments compared to 15 percent in 2006; however, more than 50 percent of consumers still are not familiar with contactless payments. Even in high penetration zip codes nearly half of all consumers are unfamiliar with contactless. Merchant acceptance of contactless is also strong and growing. There are now 75 000 US merchant locations accepting contactless payment, including taxi cabs and transit operators, according to David Robertson, publisher of The Nilson Report, a trade newsletter that tracks the payment industry. Contactless users are very positive on mobile payments as well, according to the research. Current contactless users are twice as likely to use a mobile wallet as non-users. The Alliance research showed 43 percent of contactless users were likely to use a mobile device as a mobile wallet, compared to 19 percent of the nonusers. Consumers are even ready to switch carriers to get what they want, with 47 percent of contactless users saying that they would switch mobile carriers to gain mobile payments.
Contents NEWS Contactless payment: thumbs up from American consumers
1
Credit crunch forces ID Data sale
1
Cryptography Research nails down more licensees
3
Visa payWave spreads to Switzerland
3
BART riders embrace mobile phone payment
4
Second generation ePassports put through their paces
5
New York and Michigan driving licences awarded
5
UK ID card takes next steps
6
HID Global to converge physical and logical access
7
BIOMETRIC BYTES Breaking news from the Biometrics Industry
8
CHIP TALK An innovative approach to fraud management
9
FEATURES Electronic payment: powering West Africa
10
SCM Microsystems focuses on contactless
12
ID document personalisation
13
SURVEY More than a talking shop…
13
company news
Credit crunch forces ID Data sale
I
D Data Group plc, a highly-respected UK-based smart card and card solutions group, has announced that its core business unit – ID Data Ltd – is appointing an administrator to protect it from creditors. The company had previously announced that it was seeking funds from investors and, in
parallel, pursuing the possible sale of its operating businesses in order to meet its short term working capital and debt funding requirements. (According to media sources, ID Data is being threatened with a winding up order by the Inland Continued on page 3...
REGULARS News Extra News In Brief Events Calendar Viewpoint
2 3–7 7 16
ISSN 0965-2590/08 © 2008 Elsevier Ltd. All rights reserved This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.