Contactless seems to be just getting into its stride but it may face stormy waters in the US. A provision in the Durbin Amendment could "take the wind out of the sails" of contactless payments, according to Brian Riley who is a senior research director in retail banking and cards practice at TowerGroup.
The Durbin Amendment allows merchants to set card payment minimums in order to protect their margins from interchange costs on small tickets. The highest this minimum can be is $10. On the flipside, once a transaction goes over $25 a signature is required. This would therefore limit the scope for contactless payment to transactions which are $10-$25 rather than the previously expected $0-$25.
The problem becomes apparent when you learn that Riley's research has shown an average contactless payment of $8.42. This news will stall merchant takeup of the technology. The number of merchants choosing to install near-field communication (NFO) readers for contactless payment is already "lacklustre", says Andy Schmidt (also of TowerGroup).
No comments:
Post a Comment