PayPass Locations Double in Europe in 2012, Adding Impetus for NFC Launches
Retail locations accepting PayPass in Europe reached 255,000, MasterCard said in an announcement earlier this month. Most of the terminals likely accept Visa payWave, as well. The growing infrastructure gives European banks more of a reason to issue contactless EMV debit and credit cards and mobile operators to distribute NFC-based SIM cards and phones.
MasterCard said PayPass-enabled card number in Europe increased by 50% during the year, led by Poland, where banks have already enabled half their cards with PayPass. In addition, France, Germany, Italy, Turkey, Russia, Switzerland and the UK each have at least 1 million cards enabled with PayPass.
Some countries have much more than 1 million cards on issue, such as the UK, where there is an estimated 30 million contactless cards in circulation, most of them cards supporting Visa payWave. In other countries, MasterCard has a larger contactless footprint than Visa.
MasterCard has focused on such countries as Poland, Italy and Turkey, but said 26 European countries in all support PayPass, to some degree, apparently either for cards or terminals or both. That includes eight new countries in 2012.
Among the new retailers now accepting PayPass are Marks & Spencer, IKEA, and petroleum retailer BP. Additionally, Transport for London began accepting PayPass as well as Visa payWave and ExpressPay from American Express for fares on its 8,500 London buses earlier this month.
MasterCard cited Poland as one of its top PayPass countries. The payment network recently said that PayPass was accepted at about 90,000 point-of-sale terminals in the country. A source said that this accounts for about a third of Poland’s bank card terminals.
And more than half of MasterCard-branded cards in Poland are PayPass-enabled, the company noted, adding that 25% of purchase transactions under 50 zlotys (US$16.15) in Poland are made with PayPass. This probably refers to a quarter of all MasterCard transactions in that spending range.
These small transactions, in which consumers might otherwise pay with cash, are what PayPass, payWave and other contactless payment applications are primarily targeting.
Elsewhere in Europe, the other countries MasterCard highlighted as growing PayPass markets, France, Germany, Italy, Russia, Switzerland, Turkey, and the UK, are also expected to see NFC commercial launches in 2013, or expansions of earlier NFC rollouts that remain small–such as those in Turkey and the UK.
All told, MasterCard said earlier this month that there are 550,000 merchant locations accepting PayPass globally. Besides the 255,000 locations in Europe, most of the rest of the locations are in the U.S., Canada and Australia, though there are some smaller contactless hot spots in such Asia-Pacific countries as Singapore, Taiwan, South Korea and Malaysia and New Zealand.
While contactless acceptance is expected to expand significantly in the U.S., at the same time merchants change out their POS terminals to support the EMV payment standard, that upgrade probably won’t start happening for another year or two.
Until then, Europe is growing substantially faster than the U.S. in contactless payment, believes France-based consultant François Lecomte-Vagniez, associate partner in French digital marketing firm Lobary. “In the U.S., banks are not massively issuing contactless cards, nor are merchants enabling contactless payment made at the POS,” he said “Although most U.S. and European smartphones are becoming NFC (enabled), the absence of this technology on the iPhone 5 has frozen the hype. The situation in Europe is quite different. Banks issue contactless cards in large scale and large retailers activate their POS for contactless transactions. Mobile operators are ready, too, with common and open standards and compatible SIM cards.”