Study: Adoption of contactless payments shows 30% lift in total spend

May 4, 2012

MasterCardAdvisors has released the results of its first PayPass Adoption Study, a quantitative analysis of the changes in U.S. account transaction behavior after adopting a contactless payments solution, according to a company press release. This examination of 15 months of payments behaviors offers data points and a number of insights into the adoption and use of new payment solutions such as MasterCard PayPass but has implications for NFC and mobile payment adoption as well.

In one of the study's key findings, the research showed that within the first 12 months of their first contactless transaction, PayPass-enabled accounts spent almost 30 percent more on average, using their PayPass-enabled card. The research also found a clear correlation between contactless adoption and preference for a particular card, illustrating that a contactless payments solution may help drive top-of-wallet behavior.

"In our highest spend segment, this lift translates into approximately $600 per month in incremental spend," Jonathan Orndorff, principal at MasterCard Advisors and study lead, said in the release. "Increases like this can have a significant impact on the issuer business case for contactless."

The PayPass Adoption Study also noted significant lifts in top-of-wallet behaviors such as Recurring Payments, e-Commerce and Cross Border spend.

"Lifts in not just overall spend but the quality of spend also help the business case for contactless," he said.

Most significant of these is the lift in Cross-Border spend, which exceeded 50 percent in 12 months after PayPass adoption.

"Given the lift in Cross-Border spend associated with PayPass adoption, U.S. issuers might want to consider the role of PayPass in their EMV and EMV travel card strategies. U.S. issuers can look to Canada, where we saw 'EMV+Contactless' strategies successfully deployed by many Canadian issuers during their EMV migration," Orndorff said.

Read more about payments.

Topics: Retail , Self-Checkout

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