Contactless Payments Uptake `Shocking and Welcome', says ABI Research.

OYSTER BAY, N.Y. -- Early in 2005 ABI Research forecast that "the coming year will see a sharp increase in the number of contactless payment opportunities for consumers." According to Erik Michielsen, the firm's director of RFID and ubiquitous networks, that forecast has not only proved correct, but is an understatement.

The related market for near-field communications is also seeing a surge in activity although according to Michielsen, 2006 will be "the year of NFC."

These explosively-growing sectors are examined in detail in two ABI Research studies, "Near-Field Communications" and "RFID Contactless Payments".

"The momentum in both of these markets is absolutely mind-boggling," he says.

Contactless payment systems benefit consumers, who spend less time waiting on line and find transactions easier; they also benefit merchants who can serve more customers and see fewer walk away from long lines. "Consumers enjoy using RFID," Michielsen notes, "and quickly get comfortable with using it."

These technologies show a clear return on investment. So merchants, card issuers and card associations are all making heavy commitments to contactless payment programs. Chase Card Services is aggressively trialing its "Blink" card, and other banks are expected to follow suit. American Express has its Blue card. CVS is pushing its contactless system strongly, joined by the likes of Walgreens, 7-11, KFC, McDonald's, and Regal Cinemas. Tens of thousands of reader terminals are being upgraded with contactless capabilities by VIVOtech and others. The level of interest from merchants is, says Michielsen, "shocking and welcome" to companies providing the infrastructure.

While the firmest commitments are seen in North America, interest is also strong in Europe and Asian-Pacific countries, because such technologies can be deployed anywhere in the developed world.

Michielsen says that while card-based contactless payments hog the limelight today, "Anybody who's looking at contactless payment is also looking at NFC. Examples include First Data Corporation, Giesecke & Devrient, GemPlus, Ingenico, Inside Contactless, JCB Co. Ltd., Philips, Sony, Texas Instruments, and VIVOtech."

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in automotive, wireless, semiconductors, broadband, and energy. For information visit www.abiresearch.com, or call +1.516.624.2500.