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Millions of Contactless Cards

MasterCard PayPass just issued their 50 millionth contactless chip card at the end of 2008.

It's a bit of a milestone as that doubles the number of PayPass contactless cards in circulation in just one year, and supports the recent conclusions of a BAI Study in the USA which finds cash rapidly reducing at Point-of-Sale.

Chart_02

Although cashless is unlikely, less cash is certainly true as the BAI study found that cash has reduced from 39% of consumers’ in–store
payments in 1999 to just 29% last year.

Meanwhile, here's the numbers on PayPass:

  • 50 million cards issued by end of 2008
  • 141,000 participating merchants

Based upon a 2008 consumer survey, MasterCard found that:

  • 77% use contactless as their primary form of payment
  • 68% say it lets them use cash and checks less often
  • 14%, up from 8% last year, say that availability of contactless at a store influences their purchasing decisions
  • The top stores transacting in contactless are:
    • Quick-Service Restaurants (20%) 
    • Pharmacies (17%) 
    • Supermarkets (13%)

  • Other stores where consumers would use contactless include:   
    • Department stores (61%)
    • Home
      improvement outlets (46%)
    • Movie theaters (42%)
    • Bookstores (41%)
    • Sports venues (37%)

Cathleen Conforti, Global PayPass Product Manager for MasterCard, talks about the way it works and some of the stores and devices using contactless in this short video:

As can be seen, the program for contactless is picking up with Cathleen mentioned success in about 20 countries so far, with European countries of focus including France, Italy,  Poland, Romania, Serbia, Turkey, the UK and Russia.

She also mentions one of my favourite uses of contactless, which is the use of PayPass at Manchester City Football Club (MCFC).  This won Best Technology Initiative of the Year at the Card Awards, which I co-judged this year.

MCFC PayPass

The MCFC card is issued by Bank of America and the Club, and is the world's first multi-application EMV and contactless prepaid stadium card, which also replaces the annual season ticket.  Bank of America worked with Gemalto to create a new chip combining the ISO14443 standard and Mifare emulation for access control.  Altair Financial Services supported the implementation of scripting technology to allow efficient offline balance management, whilst access control functionality came from Fortress GB who provide similar contactless access facilities for other major football clubs.

The result is that the card can be used anywhere inside and outside the stadium, as a standard Chip & PIN Card, as well as across merchants inside the Stadium as a contactless card to speed up fast food and drink purchases. 

Cathleen also talks about Turkey, where my other favourite example of contactless programmes in Europe comes from Garanti Bank, one of the most innovative banks I've seen in Europe.

My only comment on this one is that it does amaze me how many contactless ads use naked people to advertise them (Visa, Barclaycard).

Obviously, the idea of contactless is to be au naturale?

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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