Around seven in 10 people in the UK now use contactless payment in June 2019. Tap and pay accounts for more than 40% of all card transactions. Canada, Europe, Australia are also moving fast.
In the U. S. about 3% of cards in circulation are contactless (CNBC - April 2019). However the shift to contactless could be fast according to experts because many of the new EMV readers that retailers have installed are contactless-ready.
To sum up: consumers all around the globe are discovering how easy, quick and convenient contacless payment can be for small and frequent transactions with cards, mobiles, rings and wristbands.
Why banks should go contactless
For banks, the two most powerful drivers to go contactless is market positioning and finding new sources of revenue.
By offering the latest in payment experiences with value-added services, you can strengthen your competitive differentiation and build brand awareness.
Contactless enables banks to capitalize on previously untapped cash markets – and on the trend that both the number of transactions and the total amount spent increases when customers use contactless credit cards.
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Over the 2019-2023 period, A.T. Kearney forecasts that U.S. banks could create an additional $2.4 billion in incremental card-related earnings.
Consumers are most likely to use contacless payment for everyday transactions in areas like fast-food restaurants, drug stores, pharmacies and groceries. The contactless payment limit per transaction is perfectly adapted for these expenses ($100 in the U.S., €25 to 35 in Europe).
Why use contactless payment?
A contactless transaction can be up to twice as fast as a traditional credit card transaction and drastically faster than using cash – reduced queues and less hassle for both consumers and merchants.
Contactless means value for all stakeholders: issuing banks, merchants and consumers.
It sounds simple. And it is.
That is why the contactless wave (with RFID tap cards and NFC mobile phones and wearables) is gaining momentum.
Contactless payment opportunities
Opportunities abound with new exciting wearable payment devices like rings and watches, new applications in transport and major events.
New markets from the unbanked to millennials and previously cash-only segments are also at hand.
Contactless payment ring and a contactless reader
Gemalto contactless portfolio
Get in touch to find out how Gemalto can help you