Contactless cards can provide mass transit users an improved experience getting through the turnstile to board their train or getting to their seat on a bus. No need to prepay for a pass or open the app on your phone; you simply tap or wave your contactless capable card for a second or two, and you are on your way. Issuers have been working on getting contactless debit and credit cards in the hands of consumers living around the major transit systems that have adopted contactless for bank issued cards.
Merchants in the vicinity that cater to the needs of hurried commuters are prime targets for contactless acceptance solutions. The quick-serve restaurants, coffee shops, and convenience markets are perfect for quick, contactless transactions that are promoted as an alternative for low-value transactions typically purchased with cash.
A study created by TD Bank and reported on by PaymentsSource has found that merchants around the New York City MTA system haven’t gotten on board yet:
Most businesses in the zone where the MTA is piloting contactless cards are aware of the local push for NFC and their readiness is mixed, according to a survey TD Bank conducted last fall.
About half of businesses surveyed see contactless as a positive for speeding up transactions, while about a quarter see benefits in increased security from contactless cards.
About a third of merchants TD Bank surveyed said they accept contactless payments already and 27% said they plan to switch on NFC within the next year. Another 25% said they plan to add contactless in the next three years or afterward, and 20% have no NFC plans. TD Bank surveyed New York-based merchants in October 2018.
If this sort of delayed response to contactless transactions is pervasive outside of the transit system environment, then the proposed benefits of contactless for issuers and merchants including more card transactions, less cash and more secure payments is going to take a really, really long time to materialize.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group