Contactless cards: An independent, unbiased opinion

Two years ago, ThePaymentsReview published an article asking the question “Will contactless payment cards catch on in the United States?” So far, they have not. But if it is up to the major card brands, that will change very soon.

Most Americans are not familiar with contactless cards, which allow the cardholder to “tap-to-pay”, just like tapping a phone to pay. These cards are also called dual-interface cards, since they can still be used like traditional cards, but also have an antenna that can communicate with a point-of-sale terminal without being inserted or swiped; tapping to pay is the second interface. Contactless cards have a symbol  which will be instantly recognizable if the advertising, which is about to be unleashed to the purchasing public has the intended effect.

Adoption is yet to be happen in the United States, but if the trend seen in other countries is any indication, contactless is inevitable. In the U.K. more than 1/3 of every transaction uses a contactless card, and that number doubles each year. Canada is not too far behind. In Australia one bank reports 81% of all transactions for their cardholders, and another bank reports 95%, possibly reflecting different demographics or regions, but both showing the highest penetration of contactless achieved. The prediction that U.S. cardholders will follow suit seems accurate, but then again, Americans never adopted the metric system.


continue reading »