Visa USA has reached what it describes as "a milestone" in the acceptance of Visa Contactless payments, having now signed up 20,000 contactless payment acceptance locations throughout the United States.
With the merchants already accepting Visa's contactless payment platform, consumers can conduct contactless transactions at major brands such as McDonald's, AMC Theatres, CVS/pharmacy and Meijer stores. Add to this the growing number of PayPass and ExpressPay merchants (although there is some overlap) and the concept of the cashless society draws nearer still (see TowerGroup's research on 1 Feb 2006).
Demand increasing
Visa reports "significant consumer and merchant demand for contactless payments", having already issued some 4 million Visa-branded contactless payment cards worldwide.
The Visa Contactless system provides for fast transactions at the point-of-sale, making it well suited to high-volume, small-ticket merchants (such as fast food outlets, sports stadium concessions, and cinemas). But apart from Visa Contactless, Visa also aims to build consumer acceptance and usage of its payment cards for small ticket transactions by eliminating the signature requirement on purchases less than US$25 in 17 merchant segments. Visa is also working with terminal manufacturers, merchants, and municipalities to develop solutions for a range of unattended payment terminals.
According to Elizabeth Buse, executive vice president for Visa USA, "There has been strong momentum for Visa Contactless and small ticket solutions this year because making the purchase process faster and easier benefits the entire payment chain - members, merchants, and cardholders. This momentum will continue in 2006 and beyond. The cash payment market opportunity is US$1.2 trillion, and contactless will help drive the migration from cash to electronic payments."
More issuers to come
In the USA alone, millions of contactless Visa cards were issued in 2005. Chase led the way for Visa with its launch of over 6 million Chase cards with "blink" contactless payments. Chase cards with Blink were issued in markets such as Atlanta, Dallas/Fort Worth, Denver, New York, Orlando, and Philadelphia. More issuers are expected to take advantage of contactless payments in 2006 as well.
Visa's research also suggests that contactless payments provide faster transaction times, increased ticket size, greater customer loyalty, and reduced cash handling - all benefits that translate into increased revenue and reduced operating costs for the merchants that accept contactless payments. In addition, Visa says that contactless transactions are up to 25% faster than cash transactions, and in some of the core merchant categories with smaller ticket prices and high cash volumes, Visa Contactless transactions are 25% - 50% higher in value than their cash counterparts.
In the USA, Visa expects the number of acceptance locations to continue to grow as more national merchants join the programme from the quick service, convenience store, movie theatre, and fuel retail industries.
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