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Education

Coming soon: Widespread U.S.

contactless payments adoption

could be the preferred payment method in just a few
years. For example, NMI data shows that in 2013, the
number of contactless transactions on its platform from
the UK totaled about 1 million. In 2015, the London
Transport System began accepting contactless payments,
and in the next few years, UK merchants put technology
and processes in place to meet consumers' demand for this
easy, convenient way to pay.

In 2017, credit card payments exceeded cash payments
in the UK, partially due to contactless payments. And
By Nick Starai by 2018, the number of contactless payments in the UK
NMI rose to 96 million, making the UK the largest contactless
market in the world.
hange is on the payments horizon in the United
States. Consumers making card-present pay- With contactless cards on their way to consumers and
ments will soon be able to to simply tap and transit systems upgrading terminals to accept tap-and-
C go. To date, contactless payment adoption has go payments, it won't take long for U.S. consumers to
been minimal in the United States; only about 3 percent of experience how quick and easy payments can be – and
U.S. transactions processed through the NMI platform are expect that same convenience wherever they make
contactless. Several factors, however, may result in 2019 purchases.
becoming a pivotal year for contactless payments: Contactless payments growth has already begun

• Banks are issuing contactless cards: An obvious NMI has tracked the growth of contactless payments in
step toward contactless payment adoption is to the United States, with consumers using cards and mobile
provide consumers with cards equipped with RFID wallets. In 2016, U.S. consumers made just over 100,000
or near field communication chips that enable contactless payments per year, but that number grew to
contactless payments. Visa CEO Alfred Kelly about 2.2 million in 2018.
estimated that 100 million contactless cards would
be issued this year. Analysts predict rapid growth in the next few years.
Global management firm ATKearney forecasts a 30
• Payment terminals are getting ready to accept percent increase in U.S. card transactions within the next
them: Merchants on the leading edge are preparing three years, based on consumer behavior patterns in other
to accept contactless payment cards. The The countries after contactless card issuance. ATKearney
New York City Transit Authority, for example, is also anticipates that by 2022, 70 percent of all domestic
upgrading payment systems at turnstiles to accept consumer transactions will be card-based, increasing
contactless payments. about 8 percent from 2017.

• Consumers want fast, convenient, secure payment
processes: When the United States transitioned to Merchants will fall into two categories during this time:
EMV technology, consumers learned to dip rather those ahead of the curve and those who need to catch up.
than swipe their magnetic stripe cards. Contactless All signs indicate that in the very near future, customers
cards require less effort — just tapping the will expect the convenience of tap-and-go payments. Are
payment terminal or waving the card within a few you ready to help merchants address this need?
centimeters. And they're as secure as EMV cards:
they create a unique code with each transaction. Nick Starai is chief strategy officer and one of the co-founders of NMI
They create a unique code with each transaction, who played an integral role in the formation and launch of the NMI
making counterfeiting cards is extremely difficult. payments platform in 2001. He drives the strategic direction of the com-
Pattern of adoption pany and supports NMI's enterprise clients and overall partner success.
He also brings 17 years of experience in the payments and technology
If the United States follows the same pattern of adoption industry. Contact him by email at hello@nmi.com, phone at 844-378-
that has occurred in other countries, contactless payments 2146 and via Twitter @NMIpayments.

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