Discussion Paper

Contactless Payment Cards: Trends and Barriers to Consumer Adoption in the U.S.

Abstract: Since 2017, the payment cards industry has undertaken a concerted effort to bring contactless “tap-and-pay” credit and debit card products to consumers. Payment networks, card issuers, and banks have worked to ensure that contactless cards, which communicate payment information wirelessly to point-of-sale terminals through Near Field Communication technology, are at the forefront of consumers’ minds when they make a purchase. Missing from the discussion of contactless payments, however, is an understanding of consumer interest in the technology; indeed, the current activities are a relaunch of a product that underwhelmed consumers in the mid-2000s. The authors discuss environmental and technological developments that make the current market more receptive to contactless cards and describe the results of a consumer survey on the topic. We conclude that while adoption of contactless card payments is more likely, the path to full adoption has notable barriers that are revealed in the survey results.

Keywords: credit card; debit card; payment cards; contactless; tap-and-pay; mobile payments; point-of-sale payments;

JEL Classification: D10; D14;


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Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Consumer Finance Institute discussion papers

Publication Date: 2020-05-01

Number: DP 20-03