Some 58% of retail respondents to a survey from Boston, Mass.-based Aberdeen, indicate contactless adoption within the next two years. Despite this bullish outlook, the report questions the return on investment component of contactless technology.
BOSTON– Contactless payment systems are fast approaching the tipping point of adoption within retail. After numerous pilots and deployments in the last three years, the continued pressure to improve the customer shopping experience is prompting retailers to adopt this technology, says a new Aberdeen report on contactless payment systems, “Retail Contactless Payment Systems: Improving Customer Retention & Loyalty.”
According to the survey responses from North America, EMEA and Asia- Pacific, all contactless technology standards, including the most prevalent ISO 14443 smart card contactless standard, are headed for double-digit growth in 2007 & 2008. Aberdeen research reveals that 58% of all respondents across multiple retail classifications indicated that they plan to implement contactless payment solutions within the next 12-to-24 months. Close to 30% of the retailers indicated that they have already adopted and deployed contactless payment systems.
Despite growth indications, the Aberdeen report questions the ROI component of contactless technology. The report reveals that RF-based contactless payment technology will cross the tipping point of adoption in retail only when enterprises start measuring and using contactless transactional data in their internal processes and systems to attain the real ROI.
“Both short-term and long-term ROI of any customer-facing application in retail requires measurement of technology effectiveness,” says Sahir Anand, Chief Author and Research Analyst for Aberdeen’s Retail Technology practice. “The report finds that 80% of retailers do not use the contactless transactional data in any business intelligence (BI) application. Even if the measurement is small, as long as it is timely, it can provide retailers with a road map of success or a direction to make changes to the field execution that helps improve the focus on ROI.”
The research, underwritten by ViVotech, MasterCard, Alphyra, Visa and Discover Financial Services, shows readers the advantages of contactless payment systems and the factors impacting the adoption, use and the effectiveness of this emerging technology. This benchmark report demystifies the technology options, reveals ROI factors, and provides a roadmap for best practices in the development, management, and optimization of a contactless solution.