US retailers show interest in contactless payments

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By: Wise Marketer Staff |

Posted on March 11, 2003

Because retailers and consumers alike are attracted to the speed and convenience of contactless payment technology, more and more implementations and pilot schemes are now operating in the USA, according to a white paper published by the Smart Card Alliance (SCA).

Places where speed and convenience are important are the places where the contactless payment trend is starting. Petrol stations, toll booths, convenience stores, fast food outlets, and mass transit systems have been among the first to roll out pilot schemes in the US.

"Anyone who has ever seen a contactless payment take place at a highway toll booth understands two things about it: it's fast, and it's convenient," said SCA executive director, Randy Vanderhoof.

SCA's white paper examines the emerging contactless payment trend both in North America and around the world, using a very broad definition of a contactless payment.

The paper, entitled Contactless Payment and the Retail Point of Sale: Applications, Technologies and Transaction Models, claims to cover all of the main contactless radio frequency (RF) payment technologies, as well as technologies that are only in early pilot or concept evaluation phases (including infrared, Bluetooth and mobile telephone payments).

Case studies
Comprehensive coverage of several existing contactless programmes around the world shows the numbers of cards issued, the technologies used, their transaction models, and details of any additional applications involved. Other topics include:

  • The benefits and costs of contactless payment for retailers and issuers.
  • The case for using contactless technology for payment.
  • Business case and technology considerations.
  • Contactless payment technology options.
  • Contactless payment transaction models.

According to Michael Madden, vice president of e-business development for MasterCard International, SCA's white paper presents the key factors that businesses need to consider when moving forward with their own contactless payment programme.

"As consumers and merchants increasingly look for ways to migrate from cash, contactless technology joins a host of other options that complement traditional magnetic stripe cards," said Tolan Steele, vice president of end-user technology for Visa USA.

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