Boston, MA, USA
May 30,
2003
Contactless Payments: Replacing Cash with
Convenience
Report Published by Celent
Contactless payments, specifically RFID, are
presenting banks with an opportunity to capture a significant portion of a
traditionally cash-based market.
Contactless payments are increasingly seen as a
solution to many of the problems that cash and payment cards present to
industries where transaction times are crucial to business. Contactless
payments can be fast and convenient, and they offer consumers tremendous
flexibility in making purchases. Of the contactless payment technologies,
radio frequency ID (RFID) is becoming the favorite in the payments world.
 RFID
presents several benefits to each party to a transaction. It gives
merchants the ability to accept electronic payments without compromising
transaction time. It gives customers the flexibility of making purchases
quickly and without the hassle of carrying cash. It gives banks the
opportunity to capture a piece of a cash-concentrated market through
interchange fees.
"For payment providers, RFID is
appearing at a time when spending is weak and competition is tight among
issuers who are trying desperately to distinguish their cards from the
multitude on the market today," says Ariana-Michele
Moore, author of the report. "Large associations like American
Express, MasterCard and Visa, as well as banks, are
launching pilot programs in hopes in realizing a new opportunity."
Because the benefits of RFID are so
enticing, Celent expects the technology to play an increasingly prominent
role in payments. Considering that three of the top target retail outlets
for RFID payments are quick service restaurants (QSRs), movie theaters,
and movie and video game rental stores, RFID represents a significant
revenue opportunity. In aggregate, 2002 US sales in all three were over
US$160 billion. In 2007, we expect RFID payments to capture at least 8
percent of the revenue obtained by these three outlets.
The report offers readers a discussion of RFID and
an overview of RFID payment programs on the market today.
A Table
of Contents is available online.
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