Market value forecast for contactless payments
With contactless payments gaining momentum in the USA and in other markets throughout Asia-Pacific, and developments stepping up in Europe, the potential value of the world market for contactless payments is estimated at some US$724 billion, according to a report published by market analyst Datamonitor. Contactless payments have grown rapidly from the early trials in 2002 to full commercial launches in 2005. The speed of this development shows the strength of the proposition to issuers, merchants and consumers alike.
The technology is designed to make it quicker and easier for consumers to make low-value payments by card. To make a contactless payment, the consumer simply has to tap or wave their card or other payment device such as a watch or key fob on a reader at a point of sale. Within half a second, the payment is verified and the transaction is completed, and there is no need to sign or enter a PIN for low value transactions.
Datamonitor's Contactless Payment Market Opportunity Model suggests that the value of cash payments below US$25 made in six key contactless retail sectors in 2004 was US$724 billion.
Best potential markets include petrol retailing (both petrol and service station convenience retailing), which offers the greatest opportunity, US$376,4 billion in low-value cash payments were made in this sector in 2004. This is followed by convenience stores, at US$168,3 billion. Fast food accounted for US$101,9 billion, while pubs and bars accounted for US$67,6 billion, nightclubs accounted for US$6,1 billion and vending machines accounted for US$3,9 billion. The USA is the largest contactless payment card market in the world. At the end of Q1 2006, there were over 10 million American Express, MasterCard, and Visa branded contactless devices in circulation in the market. In Asia-Pacific, contactless payments have been deployed in Malaysia, Taiwan, Japan, South Korea, and Singapore. The UK and Germany present the greatest opportunities in Europe.
ISO amends RFID standard
EPCglobal, the not-for-profit standards organisation dedicated to driving global adoption of the Electronic Product Code (EPC) for supply chain excellence, has announced that its UHF Generation 2 air interface protocol has been incorporated into the ISO/IEC 18000-6 Amendment 1 as Type C on UHF RFID by the International Standards Organisation (ISO). Incorporation in the ISO standard comes just 18 months after it was ratified as a hardware standard by EPCglobal in December 2004. More than a dozen RFID readers, tags and integrated circuits have been certified as Gen 2 compliant by EPCglobal and are commercially available today. "This was the first of hopefully many opportunities for EPCglobal and ISO to cooperate," said Steve Halliday, chairman of the ISO sub-group responsible for the standard. "This is a significant milestone because it provides recognition of the work that the EPCglobal community is doing to build user-driven technical standards to advance the adoption of EPC/RFID technologies in supply chains throughout the world," said Chris Adcock, president of EPCglobal. The EPCglobal Gen 2 standard was initially developed by more than 60 of the world's leading technology companies and describes the core capabilities required to meet the performance needs set by the end user community. EPCglobal Gen 2 is a foundational element for creating standard interfaces and protocols to drive the development of new RFID hardware products to provide accurate, cost-efficient visibility of information throughout supply chains.
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