Slow and Steady Just Might Not Win the Contactless Race

Our long-held view that contactless cards were going to fizzle has really gone mainstream. Take a look at Randall Stross’ piece in yesterday’s Sunday New York Times.

His piece, “Maybe Your Old Card is Smart Enough” makes the point that those [contactless smart cards] emperors really have no clothes. The promise of faster check-out (one of the touted consumer benefits) and lower fraud costs (one of the touted merchant benefits) never materialized – contributing to why there are so few point of sale terminals that accept contactless smart cards in the US, which contributes to why there is so little consumer adoption. He also makes the point that we have been making for years now too – the longer it takes for contactless to ignite in the US, the more likely it is that a better and more beneficial solution will emerge. And, Stross points to a PIN-based card that is but one example of a technology that will make contactless obsolete before it ever gets ignited.

Speaking of ignition, that is really one of the important “lessons learned” here. Many simply underestimated the what it takes to ignite a new product in a complicated ecosystem like payments.  I’d love to have $1 for every time an analyst or consultant swore that contactless was the “next big thing” worth betting the farm for. We don’t think that distinguishing between “blips” and “bellwethers” is hard. Getting the rest of the world to listen when you’re going against the grain, often is. Thanks, Randall!



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