Contactless Mobile Payments Use May Surge in the US

Mobile payments in the truest sense—those requiring a device to use—have lagged in the US in recent years, though there are some folks still interested in putting these to work, especially at the individual store level. Just look at Starbucks. A new report, meanwhile, suggests a perfect storm may be approaching that means one big new leap forward for a new mobile payments technology: contactless cards.

Right now, based on reports from NMI, a payment gateway provider, only three percent of transactions in the US aren’t dependent on chip card or swiping readers. That means most every card in the US is either a chip-and-signature or a chip-and-PIN operation. So there’s really not much ground to lose here.

The reason for this sluggish development is mainly because there aren’t many use cases right now. Not very many merchants will actually offer the payment terminals required for contactless payments, because they don’t see much interest among their consumer bases. Yet, the consumers aren’t particularly interested because there aren’t that many places offering the service to begin with. So there can be no interest without use cases, but also no use cases without interest.

That might sound like an impenetrable catch-22 in the making, but given that consumers have been using contactless payments in the form of mobile payments systems like Apple Pay and Google Pay for some time now, that may be changing.

Throw in new partnerships like Apple Pay’s move to add near-field communications (NFC) access to its operations and new technologies like wearable devices and the potential for contactless to start taking a greater place in retail is substantial.

Ultimately, appealing to value should prove the key to success. One of the points that gave mobile payments a real leg up was appealing to value by adding rewards programs directly to the platforms themselves; customers loved the convenience and businesses loved the improved use of reward programs to maintain customer loyalty. Contactless cards may fare well using a similar approach, though it may be tougher to set up considering contactless is just a card.

Getting consumer interest might be a challenge, but new efforts on this front may ultimately provide the necessary impetus to get contactless going in a big way.