Visa: the U.S. is FINALLY ready for contactless payments!
Contactless payments, where users simply flash their cards (or, occasionally, wearables) past a scanner to make payments, have been a big hit. They’re ubiquitous in Europe, the UK, and Canada. But one developed nation which has been slow on the uptake is the U.S. According to cashless transaction giant Visa, that’s about to change.
Visa’s share price has climbed 30% so far this year
SOURCE: Yahoo Finance
Here is the scale at which contactless payments have taken over in some of the world’s major markets: up from single digits to 50% within an 18 months-to 2-year period. In Canada, they account for two out of every five face-to-face transactions. Yet, just across the border in the United States, the situation is very different. Contactless cards are rare (issuers just don’t issue them), so their uptake has been (unsurprisingly) very low. According to head honchos at Visa, however, the world’s biggest economy is now ripe for the contactless revolution.
The company’s vice president of consumer products and head of global contactless payments, Daniel Sanford, recently said: “We will soon start seeing the same contactless adoption trends emerging [in the U.S.] that we have seen in the rest of the world. But there need to be cards in the market to drive adoption.”
According to Sanford, there is a simple reason for this. Providers in the U.S. focussed on a contact-only chip card strategy. They confined their contactless efforts to near-field communication mobile wallets (think Apple Pay). That’s all well and good – except, according to Sanford “mobile adoption is still in its rather nascent phase in the U.S.”
Sanford says that contactless cards have been quickly adopted by consumers in every territory in which they have been widely issued. And he thinks a key driver in that is transit – being able to use a contactless card on a bus or metro. The U.S., he thinks, is about to follow suit.
He added: “The best thing the payments ecosystem can do is to give the consumer access to a variety of form factors and then give them the choice between cards and mobile. Some will choose mobile but we think that most people will gravitate toward the card experience.”
Dominion holds Visa in its Global Trends Ecommerce Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.