Credit and debit card customers currently are not interested in contactless and other new card technologies, according to a recent study. With the growing advances in card technologies, customers are responding with a "blase" outlook on cards that appear different from what they are used to, reports Synergistics Research Corp., an Atlanta-based market and research firm for the financial services industry.
The study included a telephone survey of 762 consumer households. The results concluded that card providers will meet with little resistance on the consumer side when rolling out new card technologies and that acceptance will most likely be brought out by a push strategy rather than consumer demand. According to the study, fewer than one in 20 consumers currently use a contactless card or mini-card payment device, such as a card attached to a key chain.
Although customers are not presently showing high interest in contactless payment cards, they will, however, adapt to the growth of these products if they see an increase of the technologies in the market, says Genie Driskill, chief operating officer and senior vice president of research, Synergistics. "Given exposure to more of these types of innovation, customer interest might increase," she says. "Right now, there is limited activity and certainly a limited number of experiments in contactless cards."
In order to succeed in marketing contactless payment devices and mini-cards, card companies should promote their benefits, such as speed, increased location acceptance and less authorization hassle, the study cites. Card companies also should plan on providing consumers with the same liability measures as a regular credit card, as well as the ability to obtain a receipt and see the amount of the transaction on a screen, at the point of sale, Driskill adds.
Location, Location, Location
Also, choosing merchant locations is key. Currently, gas stations, drug stores and fast food chains - all merchants that provide convenience - are important targets for card companies to market contactless payment devices, Driskill continues. Restaurant chain McDonald's recently announced that it will accept contactless payment devices.
In the long term, the fate of contactless cards and other new card technologies will depend on how widespread the marketing efforts are and how quickly acceptance grows, according to Driskill. Customers who already use innovative technologies within financial services are the consumers who are most likely to adopt these technologies.
"The demographics from the database looked at those who respond," says Driskill. "It would first be the ATM user, the debit card user and online banking user. All of those things run together with adoption innovation of financial services."