TMCnet News

Adoption of Contactless Payment for Retail and Transit Confirmed at Smart Card Alliance Industry Leaders Summit
[March 18, 2008]

Adoption of Contactless Payment for Retail and Transit Confirmed at Smart Card Alliance Industry Leaders Summit


(Market Wire Via Thomson Dialog NewsEdge) PRINCETON JUNCTION, NJ, March 18 / MARKET WIRE/ --

Growth and excitement continue to
surround the contactless financial and transit payment markets, industry
leaders confirmed at the Smart Card Alliance's first annual Payments
Councils Summit held recently in Salt Lake City, Utah.

Contactless Continues to Climb, Paving the Way to NFC Mobile Payments

Thirty-five million contactless financial payment cards (branded with
MasterCard PayPass, Visa payWave or American Express ExpressPay) have been
issued in the United States, with more than 400,000 readers in place at
80,000 merchant locations, according to Mohammad Khan, president and
founder of ViVOtech, in a presentation to meeting attendees.

Merchants like McDonalds, CVS/pharmacy, 7-Eleven and Jack in the Box
continue to accept contactless payments, and more merchants are jumping on
board. New acceptance locations are popping up, too, in spots like taxis,
parking meters, vending machines and sports stadiums. With the contactless
payment acceptance infrastructure in place, industry experts also
forecasted that the transition from payment cards and key fob devices to
Near Field Communication (NFC) mobile payments would be straightforward.

New company research presented by Wendy Humphrey, First Data's vice
president of enterprise payments, asked merchants to cite the benefits of
accepting contactless payments. Fifty-one (51) percent of merchants said
faster checkout and increased throughput at the point-of-sale (POS), 46
percent said the ability to support customer preference for the contactless
payment option, and 25 percent said being ready for future payment
solutions (like NFC).

The contactless payment momentum is not expected to slow; issuance will
grow to 50 to 60 million cards in 2008, Didier Serra, general manager of
the Americas for INSIDE Contactless, a leading contactless chip supplier,
forecasted.

Chase, a leading issuer of contactless financial payment cards, reported
good news regarding consumer use and loyalty. Mike Kutsch, vice president
of card services for Chase, said the company continues to see "a positive
impact on lift, shift and spend."

Contactless Moves Along In Transit

Convergence of transit and financial payment markets was a key theme
throughout the meeting, stimulated by updates on pilots by MTA New York
City Transit (NYCT) and the Utah Transit Authority (UTA) where contactless
financial payment cards are being accepted directly as fare media.

NYCT average fares on subway lines involved in the pilot were up 17
percent, while revenues were up 8 to 13 percent, Steve Frazzini, chief
officer of AFC program management, said, describing it as a "wow factor" in
the first phase of the pilot. The pilot allows riders to use their
MasterCard PayPass contactless card to directly pay for subway rides in New
York City. "The convenience factor may play an important role," he said.

Frazzini also announced that NYCT is now moving to the second phase of the
pilot, where support will be added for buses, and for all contactless
financial payment brands and form factors.

In Salt Lake City, the host city for this annual Alliance meeting, the UTA
has completed a successful pilot and is moving to full deployment of
contactless fare payment, Project Manager Craig Roberts announced. He said
that UTA will expand acceptance of all major brands of contactless
financial payment cards to regular buses, ski service buses, the TRAX light
rail line and the commuter rail line.

Transit-specific contactless fare payment programs also continue to gain
momentum in the United States, with active transit fare payment programs in
Washington, D.C.; Baltimore; San Francisco; Oakland; Los Angeles; Chicago;
San Diego; Seattle; Minneapolis; Houston; Boston and Atlanta.
Representatives from two new major transit fare payments projects,
Philadelphia (SEPTA) and Greater Toronto Area (Metrolinx), joined the
Council to participate in the discussions on contactless deployment with
other operators and suppliers.

Summit sessions also explored new models for transit payment -- using
co-branded multi-application contactless smart cards for transit and
financial payment, and looking at how transit can serve the unbanked or
underbanked consumer with prepaid financial cards.

"The Alliance is proud to be able to host an open forum for industry
stakeholders to come together and share their experiences and knowledge of
the markets for contactless smart card technology," said Randy Vanderhoof,
executive director of the Smart Card Alliance. "This kind of meeting
brings out a cross section of points of view that lead to expanded
awareness and new ideas that benefit all involved."

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.

Contact:
Deb Montner
Montner & Associates
[email protected]

Copyright ? 2008 Market Wire, Incorporated

[ Back To TMCnet.com's Homepage ]