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NEW YORK - The U.S. may have lagged behind other countries in the use of contactless payment cards, but this is set to change in the coming years, as the number of contactless credit and debit cards in U.S. circulation will reach 109 million by 2011, according to a new study by market research firm Packaged Facts.
According to "Smart Cards in the U.S.: Contactless Payment Cards," this growth is being driven by the fast-paced American lifestyle is putting pressure on retailers to serve customers more efficiently, and card brands such as MasterCard and Visa pushing for bigger slices of the small-ticket payments pie traditionally reserved for cash.
"Card issuers are rapidly expanding their market presence in contactless payments and the percentage of retailers having contactless payment systems is expected to nearly triple within two years," said Tatjana Meerman, the managing editor of Packaged Facts. "Increasing consumer awareness of the technological, safety, and convenience factors inherent in smart cards will only serve to make penetrating the consumer market much easier in the coming years."
Total purchase volume in the U.S. via cards with a contactless feature neared an estimated $15 billion in 2006, according to the study -- a 700 percent CAGR from 2004 to 2006. Packaged Facts expects this figure to increase significantly as the number of contactless transactions-nearly 777 million in 2006-are expected to reach 2.2 billion by 2011.
The study provides an analysis of the market for contactless payment, including overviews of both the smart card and payments markets worldwide and in the United States. It also examines trends affecting both markets, including forecasts of transactions and purchase volumes, U.S. consumer attitudes towards smart cards, and insights into issuer and retailer strategies.