MasterCard PayPass Trials and Survey Demonstrate Momentum of Contactless Payments

MasterCard PayPass Trials and Survey Demonstrate Momentum of Contactless Payments

Results Reveal Strong Interest in a Simpler Way to Pay

Purchase, NY, November 17, 2003–MasterCard International today announced initial results of its MasterCard PayPass contactless payment market trials taking place in Orlando, Florida and Dallas, Texas. MasterCard also announced results from a recent consumer payment survey, which showed that nearly half (49 percent) of consumers carry $20 or less in their wallet and that 86 percent of consumers reported they want to use cash less often than they currently do.

“Technology has lead consumers to expect more convenience in their everyday life and MasterCard’s challenge is to enable the most convenient payments,” said Art Kranzley, chief e-Business officer, MasterCard International. “Our key learnings from these trials will allow us to better focus our deployment efforts, leading to broader availability of MasterCard PayPass in the U.S. market and around the world.

“A major intent of the Orlando PayPass trial was to test the real-world consumer and retailer experiences of using contactless payment technology. The trial provided invaluable insight on the tangible impact contactless payments can have on how consumers pay for daily purchases and the concrete benefits retailers can enjoy from streamlined transactions,” added Kranzley.

Trial Learnings

More than 16,000 cardholders and more than 60 retail locations participated in the nine month Orlando trial of MasterCard PayPass. Trial results indicate that consumers find MasterCard PayPass to be simple, quick and convenient. PayPass cardholders value the added security that they receive from retaining possession of their card while paying. Consumers also like the convenience of not carrying cash for everyday purchases and not having to go to the ATM as frequently.

Results of the Orlando trial verify that PayPass can offer significant time savings. In some locations, MasterCard PayPass reduced purchase times so substantially as to have a tangible impact on retailers’ ability to support additional transactions and thus potentially increase revenues. The most significant time savings have been recognized in the drive-thru environment which shaved between 12-18 seconds off the purchase time as compared to cash.

Earlier this year, MasterCard began working with Nokia to incorporate MasterCard PayPass into mobile phones. A Nokia market trial currently taking place with retailers in the Dallas, Texas area allows consumers to tap or wave their phone to make payments simpler.

Initial results from the PayPass trial in Dallas reinforce speed and convenience as top benefits. The average PayPass payment made using a mobile phone was six seconds faster than using a card, due to the reduction of “fumble time” and PayPass payments matched “nearest bill payment” as the quickest way to pay in store at Dallas PayPass retailers.

  • To realize the full potential of PayPass, the following best practices are recommended for the point of sale:
  • High speed authorization connections
  • Integrated terminals and readers with direct connections to cash registers
  • Implementation in quick pay merchant environments

PayPass offers financial institutions an opportunity to grow their business by opening up new acceptance locations and allowing their cardholders to use payment cards where they previously relied only on cash. Issuers have seen a positive response by their cardholders through the incorporation of MasterCard PayPass into their payment cards. In multiple situations, MasterCard PayPass prompted occasional card users to use their cards much more frequently. Some issuers also saw positive gains in monthly transaction volume, total spending and frequency of use.

Payment Trend Survey Results

Last month, MasterCard commissioned a national telephone survey to gain additional insight into consumer payment trends and preferences. According to the survey, nearly 40 percent of U.S. adults carry less cash with them compared with 5 years ago. 26 percent say they carry ‘a lot less’ cash. Findings also showed that nearly half (49 percent) of consumers carry $20 or less in their wallet and 86 percent of consumers reported that they want to use cash less often than they currently do. These survey results are in line with 2002 studies which showed that 53 percent of consumers would use PayPass to replace cash payments if their banks offered it to them.

Future of MasterCard PayPass

MasterCard will continue to lead the industry in introducing additional contactless payment related innovations, delivering to financial institutions, retailers and consumers “The Simpler Way to Pay.” PayPass usage continues to expand in Orlando and MasterCard is also proceeding with plans for MasterCard PayPass deployments in additional locations that meet the requirements of its issuers, retailers and the growing base of contactless payment suppliers and partners. Additional information is available at