Research carried out by consultancy Auriemma Consulting Group in the UK suggests that contactless card issuers may be taking an over-optimistic view of the market. Only 3% of the sample interviewed (508 people across the UK) held a contactless card and the rest were not aware of contactless. Table 1 shows a breakdown of ownership.
Respondents displayed a high level of concern about fraud on contactless – 44% of the sample compared to 13% for ordinary payments cards. Many were unable to see the benefit of contactless either, with 35% saying they would request a contactless card only if it had a lower APR than other cards. Speed did not appear to be a particularly tempting feature – more seemed ready to switch to contactless because it appeared “cool” or “easy to use” than fast.
32% of respondents didn’t want any new cards, contactless or otherwise, suggesting that contactless might be more attractive as a replacement card rather than a supplementary one. 83% were put off by the idea of accidental payment transactions occurring with contactless – Auriemma says that this is an issue that issuers need to address urgently. 19% could not see the added value of contactless.
Auriemma felt that overall, issuers needed to concentrate on educating potential cardholders about the benefits of contactless. They should also face up to the idea that contactless cards if successful would almost certainly cannibalise their existing card base – i.e. they would be replacements rather than extras. On that basis issuers might be well advised to issue cards with contactless functionality as part of the card replacement cycle as a matter of course if they want it to succeed.