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Data for today’s episode is provided by Mercator Advisory Group’s viewpoint – Ready or Not, U.S. Contactless Debit Card Issuance Takes Off.
The argument for contactless cards is: faster payment = transaction lift
- Major banks are rolling out contactless debit cards – their hope is to steal share from cash
- US consumers use cash for smaller purchases: typically 14 cash purchases a month
- Each cash purchase averages $22
- If the ease of use for contactless debit steals 25% of those cash purchases that would add either $10.63 or $5.45 in annual interchange revenue per cardholder
- Approximately 60-70% of merchants have enabled contactless terminals
- Today, contactless cards are only 30-40% more expensive than contact-only cards
About the viewpoint
Several issuers have announced their intentions to issue dual interface cards, ushering in contactless transactions at the point-of sale for debit cardholders.
As cards issued during the migration to EMV chip cards are now being re-issued to accountholders, financial institutions are moving to contactless, even if the acceptance market isn’t quite ready.