Mass-transit systems and the support of the biggest issuers are fueling the movement of pay with contactless cards a part of everyday life. All stakeholders believe this will trigger to greater adoption of contactless payment options overall.
The theory has been reinforced by Visa’s announcement that users of the 20 million contactless credit cards issued by JPMorgan Chase & Co. can use them to tap and pay for rides on subway lines and bus routes in New York City.
Background on the MTA and Contactless Cards
The city’s Metropolitan Transportation Authority (MTA) is the first transit agency in the United States to adopt contactless payments that use Visa’s global transit framework. This means that consumers can pay for fares using any Visa contactless card, mobile device, or wearable. Experts say customers like and are already noticing that they are using tap to pay over digital wallets.
As long as the system works well, many believe this will jumpstart the use of contactless cards in New York.
Commuters often are frustrated with the way prepaid metro cards worked, and many are hoping contactless cards make this a thing of the past. In fact, according to Visa, more than two-thirds of commuters have missed trains while trying to reload their metro cards.
Stakeholders also hope the fact that riders don’t have to enroll or register to begin tapping to pay will boost user excitement and use.
Though MTA has gotten much of the publicity for adopting contactless payments, more than 80 of the top 100 U.S. retailers, including Target and CVS, accept them.
The Advantages of Tap-to-Pay
Tap-to-pay motion payments are quick, and its functionality makes transactions quicker and easier for cardholders. The contactless cards are becoming especially popular with those shoppers who have never used digital wallets, like Google Pay or Apple Pay.
Other Changes Needed to Boost Contactless Card Use
Changes need to go far beyond consumers perceptions and use. Payment terminals also need to catch up. Nearly 40% of POS terminals in the nation can’t accept contactless payments. Part of the problem is that some brands don’t want to embrace mobile payment options because they are afraid it would take away from some of their own offerings, like branded credit cards.
What This Has Meant to Card Issuers
MTA transition to contactless cards has triggered financial institutions to make a mad dash to update their cards with the new technology.
In November, JPMorgan Chase & Co. was the first primary lender to commit to tap-and-go technology for its whole fleet of credit and debit cards. A few months later, Bank of America Corp. and Wells Fargo & Co. announced they would be doing the same.
Many hope that as commuters get used to using the contactless technology to use mass transit systems, they will see the convenience it provides and be willing to use it for other purchases.
Experts are watching closely, thinking this could be the significant boost the contactless payment method needs in the U.S. The nation’s adoption of tapping technology has lagged behind those outside the U.S. Overseas, nearly 50% of all in-store transactions are completed with tap-to-pay technology.
Most commuters, on average, ride subways and busses about 10 times per week. If they begin using contactless cards that often, many expect it will become second nature to them.