New Smart Card Alliance Brief Addresses the Significant Changes Contactless Technology Brings to the U.S. Payment Card Market 10/20/2005 12:05:04 PM
PRINCETON JUNCTION, NJ, Oct 20, 2005 (MARKET WIRE via COMTEX) -- Contactless payment is taking off in the United States and its impact on the U.S. payment card market is significant. Providing both perspective and background is a new position paper -- The What, Who and Why of Contactless Payments -- from the Smart Card Alliance Contactless Payments Council. The paper provides an overview of market developments and explores the technology, benefits and security features of contactless payments. It also explains and defines the correct use of terms to foster a more accurate discussion about the features of contactless technology.
Over the next few months, significant growth is expected in the adoption and use of contactless payments in the U.S. According to the May 2005 Nilson Report, "There will be 5 to 7 million Visa and MasterCard contactless chip cards in the market by year-end, and 15 to 20 million by the end of 2006."
A contactless payment device contains a smart chip and an antenna. Instead of swiping a payment card or handing a card to a cashier, consumers simply hold the contactless device next to a contactless payment terminal and the payment is quickly processed.
Contactless payment devices use smart chip technology and are convenient, fast and secure. "They are an ideal solution for quick payment environments where speed is essential, such as quick-service restaurants, gas stations, drug stores, supermarkets and movie theaters," said Randy Vanderhoof, executive director of the Smart Card Alliance. "And there's built-in security. The smart chip is designed to protect the internal information and any transactions made," he explained. "Plus, contactless payments are built on the current credit and debit card payment infrastructure and leverage their layered security systems."
American Express, MasterCard and Visa USA have all launched contactless payment initiatives and many of the nation's top national and regional retailers, such as McDonald's, 7-Eleven and CVS, have deployed point-of-sale terminals to accept the new contactless payment cards.
The Contactless Payments Council was formed by the Smart Card Alliance to facilitate the adoption of contactless payments in the U.S. through education programs for consumers, merchants and issuers. The Council's projects will include web briefings, workshops at trade shows and the development of white papers and case studies.
The Council has compiled an extensive list of additional resources to provide up-to-date information on the status of the contactless payments programs being launched by the financial payments industry in the U.S. This list can be found at the Alliance Web site.
The What, Who and Why of Contactless Payments paper, along with the following additional Smart Card Alliance reports, are available at no charge from the Smart Card Alliance Web site at www.smartcardalliance.org.
-- Contactless Payment: Top Ten Questions answers frequently asked questions about how contactless payment works, what the advantages are for consumers, merchants and bank card issuers and how contactless payment devices using smart chips differ from RFID tags. -- Contactless Payments: Delivering Merchant and Consumer Benefits profiles leading contactless payment initiatives including MasterCard PayPass(TM) and ExpressPay from American Express and includes many quantifiable results from actual field experience in these programs. -- Contactless Payment and the Retail Point of Sale: Applications, Technologies and Transaction Models provides a comprehensive look at several contactless programs around the world and provides a detailed analysis of the technologies used to implement the different programs.
About the Smart Card Alliance
The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology. Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information, please visit http://www.smartcardalliance.org.
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