US heading towards cashless society

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US heading towards cashless society

Contactless payment cards set to take off.

The US is lagging behind the rest of the world when it comes to contactless payment cards, but this is likely to change rapidly, new research has claimed.

A report from Packaged Facts said that only 27 million contactless payment cards were in circulation in the US in 2006, compared with 582 million worldwide.

However, the study predicted that the number of contactless credit and debit cards in the US will reach 109 million by 2011.

The fast-paced American lifestyle continues to put pressure on retailers to serve customers more efficiently, and card brands such as MasterCard and Visa are pushing for bigger slices of the small-ticket payments pie traditionally reserved for cash.

This makes the time right for large-scale penetration of smartcards in the payments market, the research predicts.

Total purchase volume in the US via cards with a contactless feature neared an estimated US$15bn in 2006, registering a 700 percent compound annual growth rate from 2004 to 2006.

The figure should increase significantly as the number of contactless transactions reach an expected 2.2 billion by 2011, up from nearly 777 million in 2006.

"Card issuers are rapidly expanding their market presence in contactless payments, and the percentage of retailers having contactless payment systems is expected to nearly triple within two years," said Tatjana Meerman, managing editor of Packaged Facts.

"Increasing consumer awareness of the technological, safety and convenience factors inherent in smartcards will make penetrating the consumer market much easier in the coming years."
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