Kristin R. MoyerContactless retail payment is often referred to as a “revolutionary technology” for the payment industry; however, this view is misplaced. It represents an opportunity for some consumers to substitute the use of a payment card for a normal cash transaction and, in certain circumstances, may offer added convenience to the consumer — for example, where they have insufficient cash or coins to make a payment, or where a conventional payment card is not accepted.
Contactless payment may also offer some retailers a mixture of speedier customer throughput at tills, and the potential for some reduction in their payment-acquiring costs. Wholesale adoption of contactless payment technology may eventually succeed in driving down the overall cost of managing payments across an economy, albeit at a marginal level — as is experienced in Hong Kong with the Octopus Card — but a supply of cash will remain a mandatory requirement for most banks for a considerable period of time.
Instead of viewing it as a panacea for all payment ills, banks should treat contactless payment simply as an additional level of functionality that will help deliver a wider, more-complete payment portfolio to consumers and retailers (Gartner clients, see “Contactless Retail Payments: Banks Must Change Their Approach” for more details).
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Category: payments Tags: contactless, nfc, transit
