Contactless Cards Seen As The Answer In Micro-Debit

ATLANTA - Approximately $1.3 trillion in cash transactions are made every year for purchases of less than $5.

Not surprisingly, that enormous slice of business is attractive to many in the payments area who are seeking to convert those cash payments, for items such as coffee, fast food, transit fares, or convenience store purchases into credit or debit card purchases.

According to a new study from SYNERGISTICS Research, the best bet for achieving that goal lies in contactless cards that show the potential for helping with this goal. The study, titled "The Consumer Perspective on Micro-Payments" and based on an online survey of 1,013 consumers age 18 or older across all income groups found:

* Six in 10 survey respondents report they have heard of contactless payment cards. However, only one in seven of the consumers aware of contactless payment cards report using this type of card, representing not quite one-tenth of all respondents Usage is somewhat wider among 18- to 34-year-olds and affluent households.

* When respondents were asked how likely they would be to use contactless payment methods instead of cash for small purchases of less than $5, one in six would be "very" likely to do so; overall, almost half indicated some likelihood of using contactless payments. This intent widens with household income and is wider among younger consumers, the survey found.

"The infrastructure for contactless payments is taking shape," said Gene M. Driskill, COO of SYNERGISTICS. "There are currently 46,000 merchant locations accepting contactless payments and more than 18-million contactless cards in the hands of consumers. The development and ongoing implementation of contactless payment methods may very much impact consumers' preferences and behavior in terms of micro-payment activity. Contactless cards, which can also be used for larger purchases, should continue to be strongly promoted as a means of moving consumers away from using cash for point-of-sale micro-payments.

"Although other contactless systems-wireless devices and biometrics-do receive some promising response-the current payments infrastructure can most quickly accommodate a card-based contactless system," Driskill continued. "Increasing merchant acceptance and getting more cards into the hands of consumers is essential to grow usage of contactless payments."

For info: www.synergisticsresearch.com.