MasterCard optimistic on overall contactless payment use
People are using contactless payments for low-value transactions
PAYMENT facilitator MasterCard Inc believes that the success of contactless payments in the region would be heavily dependent on how well the major stakeholders collaborate.
“Many ecosystem partners need to come in to make it happen. We are talking about the banks, merchants, regulators and others,” said Raj Dhamodaran, group head, Emerging Payments for Asia Pacific, MasterCard.
Contactless payment systems are credit cards and debit cards, key fobs, smartcards or other devices that use radio-frequency identification for making secure payments. The ones that are commonly used today are contactless credit/ debit) cards, where users simply wave their cards at Near-Field Communications (NFC) terminals.
However, with more NFC-enabled mobile phones in the market, it is expected that the number of transactions involving NFC devices will grow. ABI Research forecasts that transactions via NFC mobile will hit US$191 billion in 2017, compared to the US$4 billion in 2012.
MasterCard's internal data also showed a similar trend – the growth momentum for contactless payment transactions is showing no signs of slowing down.
“As of the first quarter of 2014, contactless-enabled merchant locations worldwide rose 129,000 to 2.1 million. This represents a 141% year-on-year griwth," said Raj.
"Besides, the number of countries around the world where we have a contactless footprint is 63 countries (representing a 24% year-on-year growth),” he told Digital News Asia (DNA) in Kuala Lumpur recently.
Back in 2012, MasterCard had only 700,000 contactless-enabled merchants in 51 countries.
In terms of transactions alone, Raj said the company witnessed a 171% year-on-year incremental transaction growth in the first quarter of 2014 as compared with the same quarter last year.
“We are definitely optimistic about overall contactless usage, which we anticipate will be driven by migration to EMV (Europay/ MasterCard/ Visa) chip-and-pin as well as the growing development of contactless POS (point of sale) infrastructure,” he said.
Raj also revealed that the average expenditure or transaction amount for a contactless transaction globally is US$22.
“This tells us that more than ever, people are embracing contactless transactions for low-value payments,” he said.
Currently, MasterCard PayPass, its contactless-payment service, is already making its presence felt in South-East Asia. The service is available in Singapore, but has not rolled out in Malaysia yet.
It is believed that discussions are underway on making PayPass available in Malaysia, however MasterCard has no specific timeline on when it will roll out the service here.
Raj said he believes it is only a matter of time before the contactless services becomes a big trend in Malaysia.
“We believe the demand for such services will increase, especially once consumers and merchants realise the benefits,” he said.
One of the biggest benefits is that transaction for contactless payments can be done in a fast manner, making it ideal in places where speed is essential, like fast food joints, petrol stations, stadiums and others.
“MasterCard has led the transformation of mobile phones into secure payment devices through the deployment of NFC mobile technologies, as well as incorporating contactless functionality directly into more mobile phones.
“Most recently, we announced plans to publish a specification that leverages Host Card Emulation (HCE) for secure NFC payment transactions, which will enable consumers to easily use their MasterCard-branded cards on their NFC-enabled phones to make contactless payments,” Raj said.
MasterCard reports 28% growth in its contactless payment solution
Electronic payments stimulate economic growth in Malaysia: Visa
US$5.6mil Mida grant to boost Soft Space to next level
Developing online payment systems that protect consumers
To NFC or not to NFC
For more technology news and the latest updates, follow us on Twitter, LinkedIn or Like us on Facebook.