FinTech News
eMarketer: Mobile Payments Getting a Boost from Increased Contactless Card Acceptance
For years we’ve heard about mobile payments finally breaking through — but now it seems that the technology is making strides thanks in part to updated physical cards. According to eMarketer, it looks as though the steady roll-out of contactless credit cards are helping to raise the popularity of mobile payments as well.
A survey conducted by CreditCards.com and YouGov last summer found that 24% of rewards credit card holders surveyed had contactless cards — including 14% who had already made use of the feature. The introduction of these cards has reportedly helped spur the adoption of NFC-equipped point of sale terminals at various retailers. Of course, even if a consumer doesn’t yet have a contactless card, the installation of these updated terminals means they can use mobile solutions such as Apple Pay, Google Pay, and others.
Incidentally, while contactless cards appear to be doing mobile wallets a favor here at home, the opposite has proven true elsewhere. For example eMarketer notes that the early adoption of contactless credit cards in Canada, France, and elsewhere has hurt the appeal of mobile options in those countries. As eMarketer principal analyst Yoram Wurmser explains, “Though it’s possible the same scenario could play out in the U.S., we anticipate the opposite effect.”
Not only has the growth in mobile payments benefitted companies like Apple but has also provided some FinTechs and other institutions an opportunity to provide their costumers with new types of products. Look no further than the peer to peer payments app Mezu, which rolled out a digital-only debit card last year, making it easier for users to spend their balances via mobile wallets. Of course, bringing things back to Apple, their hyped Apple Card has also emphasized its digital capabilities — although the titanium, number-free physical card it mails to users also helped the offering make a splash.
Another area that has really seen an impact from mobile wallets in the U.S. is transit. Wurmser notes that NFC technology has “enabled transit systems, such as New York’s subway system, to begin testing contactless payments.” Reports suggest that, so far, as many as 80% of these contactless transit payments have come from mobile devices instead of cards.
Given the continued growth of contactless and mobile payments, eMarketer forecasts that 30.6% of smartphone owners in the United States will make proximity payments with their devices this year. That equated to nearly 70 million people. With contactless cards starting to gain traction, it seems incredibly likely that the number of retailers equipping themselves to accept such payments will climb as well. Although that might sound like a threat to mobile payments, it’s important to consider that some consumers might still prefer the ability to keep all of these cards in one digital wallet even if the physical versions gain some of the speed and security of their mobile counterparts. Ultimately it’s hard to say for sure what will happen but it seems like a win-win regardless.
