The contactless business case: How multi-purpose cards ring in new opportunities for the payments industry

Abstract

As many countries around the world have completed their chip card migration with contact cards, they are now considering ways to leverage the latest in dual-interface technology to support new applications with payment cards. There is the opportunity to capture spend in addition to cash as well as improve consumer preference for bank cards in a ‘top of wallet’ effect. This paper shows examples from Asian and European markets, where contactless pilot projects have been successfully implemented, and discusses why and how the technology could be a next step for the payment industry and could be used in specific markets. The author shows the role of performance, security, interoperability and infrastructural criteria in the implementation process: increasingly multi-purpose card combinations are possible as chip card technology advances, and the performance and security measures have consistently improved. This allows banks to form new types of loyalty programmes to acquire new customers as well as capture new, lower value, regular spend.