Contactless payment technology to change the face of retail in the region

Two of its customers, Abu Dhabi Commercial Bank and Emirates Bank have already launched their contactless credit cards, with several others in the pipeline. Network International is providing contactless card processing using the MasterCard® PayPass™ platform.

The technology, already in use across the world, does not require the credit or debit card to be swiped at a electronic payment point-of-sale terminal - instead, customers simply hold it within 2 to 4 inches of a reader for the transaction to be effected.

"The contactless technology represents a quantum shift in the way retail transactions will be carried out in the future and offers several significant advantages for both merchants and consumers," said Abdulla Qassem, Chairman, Network International.

"Being the undisputed leader in the regional card processing industry, the task of bringing this technology to the Middle East naturally devolved on us and I am happy to say that we were equal to this challenge."

In order to ensure the highest levels of payment security - an integral feature of the contactless technology - Network International undertook several audits over a period of months to ensure compliance to global norms.

MasterCard® also tested Network International's system at several places across the world before it was introduced in the market here.

Commenting on one key difference between swipe cards and contactless cards, Ram Chari, General Manager, Network International said: "Unlike traditional cards, contactless cards do not leave the cardholder's hands as they do not need a third party manual intervention for transactions. So from the usage point, contactless cards reduce that risk."

Advantage Contactless
According to a white paper issued by Smart Card Alliance (1), studies have shown that contactless payments reduce customer time at the POS by 30%-40%.

(2)Contactless transactions are 63% faster than cash transactions, and 53% faster than traditional credit card transactions.

(3)The most significant time savings are realized in the drive-through environment, where 12-18 seconds are saved off purchase times.

These increases in speed and convenience result in greater sales volumes and increased customer spending. Customers spend about 20%-30% more when using contactless payment devices than when they use cash.

(4)Customers not only spend more, costs decrease when merchants accept contactless payments. The use of contactless payments means fewer requirements to handle cash, improved operational efficiencies, and reduced maintenance costs. (Contactless readers require less maintenance than traditional magnetic stripe card readers.)

Consumers also appreciate how fast and convenient contactless payments are. A recent study reported that 71% of consumers cited speed at checkout as their primary reason for using contactless payments.

(5)Contactless payments are easy to use—consumers simply place the device in close proximity to the reader—leading to what 51% of respondents in a recent survey described as a "better customer experience."

Consumers need not worry about having enough cash or fumbling for cash in a purse or wallet.

Another advantage for consumers is their control of the contactless payment device. The device never leaves the consumer's possession, reducing the possibility of leaving it somewhere accidentally and minimizing the potential for fraud. And like merchants, many consumers enjoy being "cool" and using cutting edge technology, especially when it is packaged in one of the many form factors available for contactless devices.

In fact, one study found that consumer behavior changes when consumers use contactless payment devices. Consumers who used MasterCard PayPass showed increased loyalty to merchants who accepted PayPass, and the consumers used their contactless cards more frequently than they did their traditional payment cards.