Contactless Payments: New Merchant Data Reveals Opportunities and Threats for

Contactless Payments: New Merchant Data Reveals Opportunities and Threats for Bankcard Issuers

Published Date: March 2006

Published By: Javelin Strategy & Research

Page Count: 5

Order Code: R3424-1

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Overview

The key to growth in contactless and other point-of-sale enhancements lies in understanding the attitudes and behaviors of merchants and the enhancements they are considering. This report is based on a December 2005 survey of over 900 merchants of various sizes in seven different industry categories. The report is designed to help companies derive more value and efficiency in contactless payment implementations, through better understanding of specific implications of merchant attitudes.

Primary Questions

What differentiates merchants who are considering contactless acceptance?
What are specific opportunities and threats for issuers implementing contactless programs?
How can issuers work with merchants to drive contactless acceptance?

Major Findings

Merchants could use contactless payments technology to more easily drive private-label card programs, usurping bankcard transaction volume. Issuers must integrate merchant loyalty pro-grams into contactless acceptance campaigns, both to avoid disintermediation and to make the business case for contactless technology acceptance. Merchants considering contactless pay-ments view cash transactions and handling cash as expensive, and seek to convert these transactions to cards.

Audience: Card issuers, merchants, payment networks

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