Contactless Payments: Consumer Attitudes and Acceptance in the United States

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• Download 2006 Contactless Payments Consumer Survey, presentation by James Van Dyke, president, Javelin Strategy & Research, Smart Card Alliance Annual Conference, October 3, 2006

An independent survey of consumer attitudes toward contactless payment devices, commissioned by the Smart Card Alliance and conducted by Javelin Strategy & Research in August, 2006, concluded that there is a large, untapped market for the use of these devices

Of the consumers surveyed, 13 percent have already used contactless payment, and 95 percent of that group said it was both easy and fast. Those consumers who have tried it were confident in the new payment technology as well–84 percent said it was as safe or safer than credit cards, and that they would use it for large purchases too.

The research also showed that contactless payment is an easy sell, once the information reaches the consumer. Of consumers who are yet-to-try contactless, 75 percent are somewhat likely or very likely to adopt it. Yet 62 percent of all respondents rated themselves as not familiar with the technology, demonstrating the industry has a big marketing opportunity in front of it. When consumers who said that they were unlikely to use contactless payments were asked what would hold them back, 61 percent of that group said security would be their biggest concern.

“Contactless payment is a winner with consumers, and the banking industry still has work to do to promote it, but it is a huge market and it is very early,” said Randy Vanderhoof, executive director of the Smart Card Alliance. “It is also clear that people want to be reassured about security, and the industry has good answers to their questions. The research shows there is a big need to communicate that contactless is available today and educate consumers about how it works and the security that has been baked into this new payment technology.”

The comprehensive study is based on a 3,135 respondent survey conducted online in August 2006 concerning consumer usage and attitudes around contactless payments. The survey targeted respondents based on representative proportions of gender, age and household income compared to the online consumer average. The entire survey has a margin of error of ±1.75 percentage points at the 95 percent confidence level, while subsets of respondents have a larger margin of error.

The report describes the results of the survey and the implications of these results for financial institutions contemplating adoption of a contactless payment option.