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Contactless payments tipping point is at hand: First Data

March 9, 2010

Dom Morea is division manager for mobile solutions at First Data

Dom Morea is division manager for mobile solutions at First Data

Contactless mobile payments mean a faster checkout resulting in more revenue from increased throughput, better customer service and the loyalty of customers who prefer contactless to make purchases. 

According to First Data, an electronic commerce and payment processing company, as contactless gains momentum, more consumers will enjoy the speed and convenience of them, and will remember which stores provide this option. A a study by Javelin Strategy and Research found that 37 percent of card users interested in contactless would switch issuers to get it.

Mobile Commerce Daily’s Dan Butcher interviewed Dom Morea, division manager for mobile solutions at First Data, Atlanta. Here is what he had to say:

What is the current state of contactless mobile payments, and what is its potential impact on commerce going forward?
We believe that mobile commerce has a very bright future as consumers are moving quickly to a mobile lifestyle and are adopting technology and applications at a fast past.

In the United States market, we think that contactless sticker and microSD implementations will accelerate consumer adoption and market development efforts in 2010.

Pre-NFC mobile applications that further enable consumers to wirelessly manage their payment accounts, whether credit, debit or prepaid, as well as conduct loyalty and coupon redemption via SMS and bar codes, for example, will allow merchants to really gain experience as they develop their mobile marketing strategies.

We also think solid advances in NFC, payment-enabling services and infrastructure such as Trusted Service Management will happen so that scale implementations of NFC will be more possible than ever before. 

As the handset market heats up and differentiated features become more important than ever, we expect that a greater number of NFC-enabled handsets will start to appear in the market.

What advice do you have for retailers?
Having contactless and NFC-enabled phones is definitely on the horizon and there are a few handset manufacturers offering such devices today.

Once these devices are widely available and in consumer’s hands, merchants that have already outfitted their POS to accept contactless payments and experimented with mobile marketing and mobile loyalty services that their customers enjoy and respond to, will gain advantage from increased sales that are the result of greater consumer satisfaction and brand loyalty. 

They will also be at an advantage over those merchants who have not yet adopted contactless.

Today, the implications of not implementing contactless are that merchants could be scrambling once NFC really takes off, and we are seeing signs it’s gaining momentum.

If merchants begin now to outfit their systems to accept contactless payments they will be ready once a critical mass is reached. They will also be able to increase efficiencies today that will only grow as customer preference for contactless intensifies.

One major thing merchants can do today is to implement contactless at the POS. This way they are well prepared ahead of the surge; their staff is trained on the technology and they have examined and addressed all operational considerations.

Merchants can easily integrate contactless into their current POS system.

Point-of-sale equipment that has integrated contactless reader technology, magnetic stripe reader and PIN pad capability, such as the First Data’s FD-30, can easily connect to the existing POS terminal.

This way they can accept PIN-based debit transactions, traditional card swipes and contactless tap-and-go transactions that provide their patrons with more options in how they would like to pay.

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Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

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