Consumer awareness hinders contactless payments

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By: Wise Marketer Staff |

Posted on November 8, 2007

A general lack of customer awareness is the top challenge impeding the use and adoption of contactless payment systems around the world, according to a new study from Aberdeen Group.

Aberdeen surveyed 225 global companies in October 2007 for its benchmark report, 'Cashing in on Contactless: The Roadmap to Successful Contactless Payment Implementation'.

Follow the leaders
According to Aberdeen data, 63% of best in class companies that have already adopted contactless payments at retail locations are responding to the challenge of customer awareness by defining a set of return on investment (ROI) objectives and goals surrounding contactless implementation.

The survey data shows that 41% of best in class companies have implemented a contactless solution, and 41% are considering implementation. Of the best in class companies that have contactless technology, 91% have improved their total number of transactions, and 100% have 80% or more of their customers extremely satisfied.

A central database is key
When compared with all other companies, the best in class are over twice as likely to have a cross-functional team in place for store-level execution, and are nearly four times as likely to gather and store contactless data in a centralised database for analysis.

Despite the cohesive preparation of the best in class, the key performance indicators used to measure contactless solutions and where the ROI is expected differs between the best in class, industry average, and laggard segments.

"This research indicates that retailers are not consistent in their perspective of contactless technology, which threatens the ability of this technology to reach critical mass and enable users to drive further ROI," said Sahir Anand, a retail analyst at Aberdeen. "In order to derive ROI from an implemented contactless solution, companies need to create strategic in-store and data analysis goals for implementation, improve customer awareness, and drive higher circulation of contactless form factors."

What happens next?
In order for contactless payment technology to reach critical mass and drive further customer and organisational improvements, companies need to focus on contactless payment process management strategy, both internally and externally, or their contactless returns will never be maximized.

A free copy of this report has been made available for free download from Aberdeen Group's web site - click here (free registration required).

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