PELORUS Group: Contactless Cards, m-Payments, And Biometric Payments To Enjoy Solid Growth.

RARITAN, N.J. -- Three emerging payment alternatives to the traditional magnetic stripe credit/debit card payments regime, when combined, hold the potential to significantly alter the payment landscape. Contactless credit and debit card payments (sometimes called proximity payments), mobile payments (m-Payments) and biometrically authenticated payments will each levy its own unique impact over the next five years. Together, they could garner over $400 billion in revenue by 2011.

According to a new report from The PELORUS Group entitled "Alternative Payments: Changing The Rules", several drivers are converging to increase the demand for new payment alternatives. Whether with brick and mortar or Internet payments, the speed and convenience needs of consumers, and their need and desire for alternative payment form factors, and merchant needs to retain customer loyalty are important drivers altering payment habits and methods. Moreover, the continuing need for security when making payments is driving both technical and payments innovation, as is the need by a large segment of the population for more real-time information on balances. Payments other than by cash are being made across increasingly diverse payments applications, such as for parking, vending, mass transit and other micropayments. Finally, the large number of unbanked and underbanked consumers in the U.S. and worldwide have payment needs not being fully met by traditional card based payment systems.

According to the report's principal author, Vance Hodnett, Vice President of Financial Services with The PELORUS Group, "In the nascent melding between traditional payment systems offered by financial institutions and payment systems offered by others, such as telecom carriers and independent service providers, financial institutions will have both an opportunity and a threat when it comes to offering consumers functional and suitably responsive payment systems. Over the long run financial institutions will find it in their interest to offer their customers more flexible and convenient payment methods."

The PELORUS Group estimates that aggregate revenue from contactless, m-Payments, and biometric payments at U.S. merchants will grow over 15-fold by 2011 from a 2006 level of $27 billion. Contactless payments will reap the bulk of the growth, but the potential for the other payments through 2011 and the opportunities developing for payments innovators as a result of that growth, should not be underestimated.