As issuers mail out contactless credit and debit cards by the millions, it's not clear how often they are being used.
Several payments executives say consumer interest in the technology is falling off, and they blame the banks' and card networks' apathy. Even the format's biggest backers concede they have sacrificed broad-based marketing, preferring to promote contactless cards in the cities and industries where they are most likely to be successful.
Observers say this approach is relegating the technology to the periphery.
"Even if you do have a PayPass and/or a blink card, it's very unlikely that you know what it means," said Nick Holland, a senior analyst at Aite Group LLC. "They've just done a totally crappy job of pitching this. … Merchants have told no one about it. Card networks have told no one about it. The issuers haven't really told anyone about it."
From the numbers, it would appear that contactless is booming. At the end of the third quarter of last year, MasterCard Inc. said that more than 66 million of its contactless PayPass cards had been issued worldwide, up 50% from a year earlier. JPMorgan Chase & Co., primarily a Visa Inc. issuer, has sent out 30 million of its blink-branded contactless cards to date, triple the number in 2007. The New York banking company began issuing blink cards in 2005, and it is also adding contactless capabilities to cards it is reissuing to customers it took on from Washington Mutual Inc. in 2008.
But while the companies boast about issuance, they are mum on contactless transaction volume, and their marketing push is nowhere close to the level of several years ago, when they began promoting the cards in earnest.
Stuart Taylor, the vice president of global marketing for the terminal maker Hypercom Corp., said the lack of communication has hurt adoption.
"There is little-to-no marketing by the issuers in most parts of the country, and as a result, there is little usage — and retailers question whether they want to make the investment" in his company's contactless readers, Taylor said.
If not for the fact that he works in the payments industry, he would not have known that his bank had sent him a contactless card, Taylor said.
"I noticed that it had a PayPass logo on it — on the back, not the front," he said. Aside from some extra-fine print in his cardholder agreement, "that's 100% of the marketing that I've seen from my bank."
The card brands defend their quieter approach.
Cathleen Conforti, MasterCard's senior vice president for global PayPass solutions, said that MasterCard's nationwide marketing push has tapered off, but this is because the format is taking off, and there is now less need to educate people about how it works.
"Are we doing as much television? Not as much," she said. "We did that around an initial rollout, and we don't feel we need that level of support at this stage."
Stephanie Ericksen, Visa's head of cross-product services, said her company is trying to build a "concentrated acceptance space" because a nationwide push is impractical.
"We're trying to be more targeted," she said. "When we're rolling out a new technology, we do try to focus on a concentration of cards and terminals and merchants all being in the same area."
Contactless payments have always faced a conundrum: Merchants have little incentive to deploy terminals for a format that is not yet universally embraced by consumers, but consumer demand is unlikely to take off if people can't make contactless payments.
