Identity, Security, Payments, Biometrics, Smart Cards and Authentication News

Contactless payments critical mass contingent on customers

Friday, November 9, 2007

Despite advertisements by the major credit card companies on the advantages of contactless payments and more roll-outs on the horizon, customers still don’t know that much about the speedier transaction mechanism which could hinder usage and adoption, according to a new study.


BOSTON, MA–Aberdeen, a Harte-Hanks company, surveyed 225 global companies in October 2007 and found that lack of customer awareness is the top challenge impeding the usage and adoption of contactless payment systems.

According to Aberdeen’s research, 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.

Aberdeen’s research shows that forty-one percent (41%) of the Best-in-Class companies have implemented a contactless solution, and 41% are considering implementation. Of the Best-in-Class that have contactless technology, 91% have improved their total number of transactions, and 100% have 80% or more of their customers extremely satisfied.

When compared with all others, 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 centralized database for analysis. Despite the cohesive preparation of the Best-in-Class, the key performance indicators used to measure contactless solutions and where the return-on-investment (ROI) is expected differ between the Best-in-Class, Industry Average, and Laggard segments.

“Our 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, Retail Analyst, 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,” says Anand.

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

A complimentary copy of this report is made available due in part by the following underwriters: Discover Network-A Business Unit of Discover Financial Services, Dove Consulting, a Subsidiary of Hitachi Consulting, Mastercard International, ViVOtech, and VeriFone. To obtain a complimentary copy of the report, visit its web site.

About Aberdeen Group, a Harte-Hanks Company Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen’s analytical and independent view of the “customer optimization” process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to www.harte-hanks.com[end] 

Superdrug, one of Britain’s largest beauty and health retailers, has introduced contactless payment for its in-store customers, according to Retail Gazette.

Created by Streamline and Visa Europe, the contactless system will enable customers to make payments of up to £15 (approx. USD $23) by simply waving their contactless bank card at the more than 50 participating Superdrug stores in London and Liverpool.

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Proxama has announced a partnership with semiconductor supplier ARM Holdings to create secure payment mechanisms for mobile handsets.

The UK-based partners say they will combine ARM’s TrustZone technology with Proxama’s Mobile Wallet to develop a “highly secure” environment for NFC-enabled mobile contactless payments and mobile internet payments.

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Visa Europe launched its second quarterly Contactless Barometer benchmark, studying consumer attitudes and perceptions on contactless technologies across the UK, Poland and Turkey. Research is based on the surveys of 1,700 banked individuals and in-depth panel sessions with around 500 contactless card owners per market.

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The European Payments Council (EPC) has published the second edition of its “White Paper on Mobile Payments.”

According to EPC, the white paper focuses on the usage of the mobile payments in the Single Euro Payments Area (SEPA) and explores how m-payment services can be delivered through cooperation between service providers in the payment industry and players within the mobile ecosystem.

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A new survey from Euro Kartensysteme shows that Germans are starting to embrace the idea of contactless and NFC payments.

Out of 1,040 Germans aged 18-59, 43% responded that they would like to make contactless payments if given the opportunity, of which 58% percent would make their payments with a debit card card, 41% with a credit card and 50% with an NFC phone.

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Ed McLaughlin, MasterCard’s head of Emerging Payments, has some good news for those waiting on NFC-enabled phones for contactless payments.

In an interview with Fast Company, McLaughlin said that he didn’t know of a handset maker who wasn’t working on integrating support for PayPass contactless payments.

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