2012 is meant to be “the year of the contactless payment,” however a number of industry analysts believe that the technology is failing and, in turn, costing the consumer money, according to This is Money.
Reports estimate that the cost of developing, installing and maintaining contactless terminals will be left for the consumers to deal with. Dual interface chip and pin cards typically cost more than standard cards, and retailers pay fees to card issuers when payments are made. Retailers must recoup that somehow – that is to say in pricing – which leaves consumers on the losing end.
“The consumer has to benefit through incentives, discounts or by being offered rewards,” explains James Ratcliff, editor of Cards International magazine. “This requires investment from the retailers; retailers who see little value in promoting it. So it becomes a bit of a chicken and egg situation.”
Visa Europe reported that it experienced an estimated 6.8 million contactless transactions in 2011, quadrupling its 2010 figures. But experts say this is merely a “drop in the ocean,” when you take into account that there are roughly 2.8 billion ATM cash withdrawals each year.
Despite all the bad vibes circulating, industry experts remain optimistic that contactless cards certainly won’t be scrapped. A lot of investment has been made in the technology, and that investment will be repaid over time.
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