The 2011 contactless payment card shipments in the United States have taken a dramatic drop, according to ABI Research.
The number of shipments has fallen considerably when comparing against quarterly shipments achieved in 2010, explains Phil Sealy, research analyst, security and ID. And the drop in shipments has primarily been driven by some overriding factors including:
The Durbin amendment, which was passed in July 2011, capped interchange fees. As a result, MasterCard and Visa responded by pulling their discretionary discounts allowed on low-value transactions. This left merchants with no incentive for accepting cards for low value transactions, directly affecting contactless payment cards.
As a result of an uncertain US economy many credit card companies dropped card promotions, which directly affected demand.
Sealy comments, “Any possible move to EMV (present or future) could see further hits to pure contactless numbers with banks potentially investing in favor of dual interface chip cards offering both contact and contactless capabilities.”
ABI Research remains skeptical and believes the dip in shipments will continue into 2012 with a possible recovery being seen mid-year.