|ABI Research Sees Crucial Contactless Payment Pieces Falling into Place|
Posted: 26-Oct-2004 [Source: ABI]
[Research group sees payment paradigm shift looming as contactless payment systems come online.]
Oyster Bay, NY -- Payment processing companies, credit card issuers, banks, retailers and the all-consuming public will soon begin experiencing a payment paradigm shift as the final pieces fall into place for secure "contactless payments."
The recent joint announcement by electronics giant Philips and payment transaction software creator ViVOtech, of a partnership marrying Philips' near-field communications (NFC) technologies with ViVOtech's readers and processing software, takes contactless payment one big step closer to reality. Armed with an NFC-equipped mobile phone (or some other device, but all bets are on the phone as top choice), a consumer at a checkout or cashier need only wave it near a "reader" to have a credit transaction automatically initiated and carried out.
ABI Research's study, "Near Field Communications (NFC)" enables cellular handset and consumer electronics OEMs, as well as potential end-users, to understand how consumer behavior, loyalty, and spending will change as a result of adding RFID-based NFC digital technology.
According to ABI Research's director, RFID and ubiquitous technologies, Erik Michielsen, "contactless payments based on NFC can't take off until payment infrastructure is there in the marketplace. ViVOtech, with long experience in payment processing, is an important addition to the list of companies -- Sony, Philips, Visa, Nokia and Samsung -- that have embraced this vision."
Except for Japan, where Sony's FeliCa card allows contactless payments in some closed-loop transport systems, all deployments of NFC-based payment until now have been trials only. But, says Michielsen, those trials have produced results that card issuers, banks and merchants love: quicker transactions, 20% more purchases, and a 20%+ lift in value per transaction compared to traditional credit cards.
Michielsen adds one warning: to succeed, real deployment of contactless NFC-based payment systems must be made as easy as possible for merchants, keeping disruptive upgrades of their existing charge systems to a minimum.
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