More than a decade after the U.S. payments community tried and failed to make contactless payments work, EMV resentment and a well-funded mobile payment app movement may make U.S. contactless payments not merely viable, but vibrant—perhaps as soon as late 2018.
One result could be that the U.S. adopts mobile contactless payments before and in higher numbers than chip cards as tech giants like Apple and Samsung and Google blitz consumers with mobile payment app marketing that was not a factor when the country tried contactless a decade ago.
The scenario comes up as new data from the U.K. shows contactless payments dramatically on the rise as the U.S. struggles to catch up with a payment method –EMV–that is sooo 2012.
According to the U.K. Cards Association, consumers spent £9.27 billion ($12.8 billion) on 1.1 billion contactless payments between January and July, compared to £7.75 billion ($10.2 billion) all of 2015. In July, nearly 20 percent of all purchases using a card used contactless readers, compared to 7 percent in July 2015.
Visa and Mastercard mandate that retailers adopt contactless payments readers when they revamp their POS systems. The British Bankers’ Association reports that British banks issued 15 million contactless cards in 2015. Five of the U.K.’s largest bus companies said they will launch contactless fares by 2022.
Meanwhile, one projection puts the U.S. at the same adoption rates for EMV terminals (71 percent) as the rest of the world was in the first quarter of 2011. Of course the U.S started much later but that’s not the point here.
It was never and it’s not now a race for global EMV use, but the U.S. will never catch up if the rest of the world is not just ahead in the use of current technology but is on to the next one, and the argument over chip and PIN or chip and signature will be moot when biometric or voice authentication trumps both in security.
Instead, the U.S. is being marketed heavily by ApplePay and Android Pay and Samsung Pay and Insert Major Retailer Pay, and the efforts may pay off in an uptake of mobile contactless much higher and quicker than EMV card use, contactless or not. Smartphones are NFC enabled now and mobile in person payments have the highest projected increase from 2014 to 2019 of the three ways to pay with mobile (remote, in-person, peer to peer).
In this way, the U.S. could become like some developing countries who have never known retail banking and have gone straight to mobile financial capability.