
This report presents the findings of research into the growth of this payment technology in key regions around the world. The picture that emerges is one of fragmentation and complex commercial models, with a marked lag between contactless card issuance and merchant acceptance, even in those markets considered to be well developed. In the US for example, there are around 100m contactless cards in issue, yet only a relatively small percentage of merchant outlets are reported to accept this form of payment, despite it being available for nearly ten years. Migration to chip and PIN is a more emotive topic in the US, with retailing giant Walmart making its position clear in the media as being in support of this more secure payment method, ahead of the introduction of contactless payments. This makes sense when the level of plastic card fraud in the US is taken into consideration. The push for migration is also in line with the strategic aims of large retailers to gain a greater share of consumers' wallets by broadening the range of products and services offered in stores. Merchant acceptance of this payment methodology, alongside the issuance of cards and other payment devices, is crucial to the success of contactless payments. The majority of merchants are unlikely to be willing to fund the migration to contactless payments unless a clear business case and short payback period can be identified to them. In a number of countries, for example, Turkey and the UK, the card issuers and payment processing companies are footing the bill for the introduction of the required technology, and this will need to continue in order to increase merchant acceptance of contactless payments until the benefits of migration have been conveyed.