Contactless Credit Card Technology Not Understood By Consumers
Cardbeat, a syndicated market research report from Auriemma Consulting Group, reports that "contactless credit cards that allow cardholders to wave-and-pay at checkout terminals fitted with contactless technology sensors is not yet the smash-hit that industry leaders had expected." According to the report, "consumers have indicated that contactless technology is not an easy sell. In light of the credit crunch, and increasing insecurity about the risk of identity theft, consumers need additional encouragement to acquire a new card – even if it features a compelling new technology."
Highlights from the study include:
- Only 3% of the population is familiar with contactless technology. Clearly, the card industry’s next task is to educate the consumer to increase understanding of this payment method. li>Consumers want contactless cards after learning more about them. After reading an explanatory paragraph about contactless payments technology, consumers were 7 times more likely to want a contactless card than before they read the description.
- After reading the description of the technology, 63% of consumers would use a contactless card more than a standard credit card because of its “cool new technology.” 67% of consumers would use a contactless card more than a standard card due to its “ease of use.”
- 23% of consumers would not use contactless cards because of concerns of identity theft; a robust education-focused campaign should address this concern.
Matt Simester, Director at Auriemma Consulting Group comments, ‘evidence is quite clear that the consumer is not familiar enough with contactless cards in order to make a decision to own one of these cards. Education is the single most important change that lenders can do to drive consumers towards contactless card acquisition.’
"Only 3% of the population is familiar with contactless technology"
Don't more than 3% of the population already have a contactless card? Something's gone wrong with customer communications somewhere!
Posted by: Dave Birch | July 16, 2008 at 09:16 AM
It's Chase’s fault. They decided to brand their contactless as ‘blink’, yet MasterCard PayPass is a much more successful brand. People identify with brands not kinds of technology.
I saw an article of a local Texas news station where the reporter referred to it as PayPass - all well, but there are other brands out there. It seemed to me the reporter was suggesting at the end for people to call their bank and get a non-PayPass card. The example in the article was not a PayPass card, and PayPass is not the only contactless brand—thus the confusion. People with PayWave and ExpressPay should be concerned too.
That reporter must be in the 97% who are unfamiliar with contactless technology.
Posted by: ns | July 17, 2008 at 05:54 AM
Consumer & retailer education is imperative for any new technology to be adopted.
I was in Office Depot yesterday afternoon picking up some home office supplies when at the check-out I had my first run in with ViVOtech. I asked the check-out clerk how this system works & how often it gets used. She said in the 6-months she been working there she's only had 3 or 4 customers use it & it never seems to work. She said those few customers were all AMEX card holders. Ingenico was the POS terminal vendor.
Posted by: Brian Kirk | July 24, 2008 at 08:52 AM