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Smart Cards in the U.S.: Contactless Payment Cards

A Smart Time for Contactless

As 2006 came to a close, smart cards in the consumer card payments market had reached near full penetration in western European countries such as France and the United Kingdom. What was once a cutting edge technology is now a standard in the wallets of many Europeans.

In the United States, this market has struggled to gain a foothold. But, smart cards may now be getting a second chance in the form of contactless technology. The fast-paced American lifestyle continues to put pressure on retailers to serve customers in an ever-more efficient manner. At the same time, card brands such as MasterCard and Visa, are pushing for a bigger slice of the small-tickets payments pie traditionally reserved for cash. The time is finally right for large-scale penetration of smart cards in the payments market.

According to the new Packaged Facts report, Smart Cards in the U.S.: Contactless Payment Cards, roughly 27 million contactless payment cards were in circulation in the United States in 2006. If circumstances permit, that number could top 100 million by 2011. What’s more, increased penetration of contactless payments is expected grow transaction volumes and even managed balances for issuers.

This targeted report provides in-depth analysis of the small, but potentially large market for contactless payment cards in the United States. For perspective, it includes overviews of the overall smart card market worldwide and in the Untied States and the worldwide and U.S. payments markets. Also included are trends affecting the payments and contactless payments markets and analysis of consumer attitudes towards payment cards derived from the Annual Consumer Survey conducted by Simmons Market Bureau. To complete the report, an in-depth analysis of the potential market including forecasts of number of cards and increases in transaction and purchase volumes through 2011 is provided.

Report Methodology
The information in Smart Cards in the U.S.: Contactless Payment Cardsis based on both primary and secondary research. Primary research involved extensive interviews with senior marketing, public relations and industry executives within the banking, retail and credit card markets and consultants to the industry. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature, annual reports and 10(k) filings, white papers, and data from databases such as CardData and CardLine. Consumer data was obtained from Simmons Market Research Bureau’s Fall 2006 National Consumer Study. Media spending data was obtained from TNS Media Intelligence.

What You’ll Get in this Report
Smart Cards in the U.S.: Contactless Payment Cardsmakes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that Smart Cards in the U.S.: Contactless Payment Cards. offers.

Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.

How You Will Benefit from this Report
If your company is already doing business in the smart card and contactless market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for smart cards and contactless payments, as well as projected markets and trends through 2011.

This report will help:

  • Marketing Managers identify market opportunities and develop targeted promotion plans for smart cards and contactless payments.
  • Research and development professionals stay on top of competitor initiatives and explore demand for smart cards and contactless payments
  • Advertising agencies working with clients in the banking and retail industries understand the product buyer to develop messages and images that compel consumers to use smart cards and contactless payment options.
  • Business development executives understand the dynamics of the market and identify possible partnerships.
  • Information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.


  • Executive Summary
    • Scope of Report
      • Methodology
      • What Is a Smart Card?
      • Smart Card Applications
      • Types of Smart Cards
    • The Worldwide Market for Payment Smart Cards
      • 582 Million Payment Smart Cards in Circulation Worldwide
      • U.S. Contactless Card Payments Market Still in Infancy
      • 27 Million Contactless Payment Cards In Circulation
        • Table Total U.S. Contactless Payment Cards, by Brand, 2002-2006 (in millions)
        • Table U.S. Market Share of Contactless Payment Cards, by Brand, 2006 (%)
        • Table Estimated U.S. Transactions from Cards with a Contactless Feature, by Brand, 2004–2006 (in millions)
        • Table Estimated U.S. Purchase Volume from Cards with a Contactless Feature, by Brand, 2004–2006 (in million $)
    • Market Forecast
      • Total Contactless Payment Cards to Reach 109 Million by 2011
        • Table Projected Total U.S. Contactless Payment Cards, by Brand, 2007–2011 (in millions)
      • 2011 Contactless Transactions Reach 2.2 Billion
        • Table U.S. Contactless-Enabled Payment Card Transactions, Contactless Versus Magnetic Stripe Transactions, 2007–2011 (in billions)
    • Marketing Dynamics
      • Contactless Product Introductions
      • Retailers a Driving Force in Contactless Integration
      • Top Financial Services Companies Ad Spend
        • Table Selected Financial Services Companies Ranked By Total Measured U.S. Advertising Spending, First Half of 2006 versus First Half of 2005 (In Million $)
      • Selected Smart Card Marketing Initiatives
      • Product and Design Innovation to Explode
      • Corporate Landscape in Flux
    • The Consumer
      • Credit Card Brand Penetration
        • Table Household Penetration Rates for Major Credit Card Brands, 2003-2006 (%)
      • Credit Card Brand Demographic Indicators
      • Younger Consumers: Financial Insecurity and Immaturity
      • With Age Comes Awareness
      • Issuer Tests and Trials Provide Insights Into Consumer Acceptance
  • The Smart Card Contactless Payments Market
    • Overview
      • Methodology
      • What Is a Smart Card?
      • Smart Card Applications
      • Types of Smart Cards
    • The Market for Smart Cards
      • The Worldwide Market for Smart Cards
        • Table Total Worldwide Smart Card Shipments, by Type, 2002–2006 (units in millions)
        • Table Worldwide Market Share of Smart Card Shipments, by Type, 2006 (in millions)
      • The U.S. Market for Smart Cards
        • Table U.S. Versus Worldwide Smart Card Shipments, 2002–2006 (units in millions)
        • Table U.S. Market Share of Worldwide Smart Card Shipments, 2002-2006 (%)
    • The Market for Payments
      • The Worldwide Market for Payment Cards
        • Table Number of Payment Cards in Circulation Worldwide, by Brand, 2002-2006 (in millions)
        • Table Worldwide Market Share of Payment Cards, by Brand, 2006 (%)
      • The U.S. Market for Payments
        • Table Total U.S. Payment Card Purchase Volume, by Brand, 2002–2006 (in billion $)
        • Table U.S. Market Share of Payment Card Purchase Volume, by Brand, 2006 (%)
        • Table Payment Card Share of Personal Consumption Expenditures, by Brand, 2005 and 2006 (%)
        • Table Payment Card Share of Personal Consumption Expenditures Versus Total PCE, by Brand, 2006 (%)
        • Table U.S. Payment Cards in Circulation, by Brand, 2002-2006 (in millions)
        • Table U.S. Market Share of Payment Card Purchase Volume, by Brand, 2006 (%)
        • Table U.S. Payment Card Transactions, by Brand, 2002-2006 (in billions)
        • Table U.S. Market Share of Payment Card Transactions, by Brand, 2006 (%)
    • The Worldwide Market for Payment Smart Cards
      • 582 Million Banking and Payment Smart Cards in Circulation
        • Table Banking and Payment Smart Cards in Circulation Worldwide, by Brand, 2002–2006 (in millions)
        • Table Worldwide Market Share of Banking and Payment Smart Cards, by Brand, 2002-2006 (%)
        • Table Percentage of Smart Cards to Total Cards Worldwide, by Brand, 2002–2006 (%)
    • The U.S. Market for Smart Card Contactless Payment
      • For Payment Smart Cards, It's Contactless
      • Why Contactless Payment Cards Haven't Stuck
      • Contactless Card Payments Market Still in Infancy
        • Table U.S. Contactless Payment Cards in Circulation, by Brand, 2002-2006 (in millions)
        • Table U.S. Market Share of Contactless Payment Cards, by Brand, 2006 (%)
        • Table Estimated U.S. Transactions from Cards with a Contactless Feature, by Brand, 2004-2006 (in millions)
        • Table Estimated U.S. Purchase Volume from Cards with a Contactless Feature, by Brand, 2004- 2006 (in million $)
    • Market Forecast
      • Total Contactless Payment Cards to Reach 109 Million by 2011
        • Table Projected Total U.S. Contactless Payment Cards, by Brand, 2007-2011 (in millions)
        • Table Projected Total U.S. Payment Cards, by Brand, 2007-2011 (in millions)
      • Contactless Cards to Rev Up Transactions, Slow Purchase Volume Growth
        • Table Total U.S. Payment Card Transactions and Purchase Volume, 2007-2011
      • 2011 Contactless Transactions to Reach 2.2 Billion
        • Table U.S. Contactless-Enabled Payment Card Transactions, Contactless Versus Magnetic Stripe Transactions, 2007-2011 (in billions)
  • Factors to Growth
    • Educate Consumers on Convenience and Safety Factors
      • Politicians Cry Wolf on Safety
      • Retail Acceptance Increasing
      • Is Direct Mail Smart for Smart Card Payments?
        • Table Growth of U.S. Card Solicitations, 1998-2006 (in billions)
      • Population Growth
      • Reach Out to Minority Populations
        • Table Purchasing Power of U.S. Minorities: 1990, 2000, 2005 and 2010 (in billion $)
      • Gross Domestic Product
      • Interest Rate Dilemma
      • Greater Disposable Income
        • Table U.S. Population's Personal Income and its Disposition, 2004-2005
        • Table U.S. Population's Personal Income and its Disposition, 2006 (April-November)
      • Consumers May Immediately Mobile-ize
  • Marketing Dynamics
    • Overview
      • Retailers a Driving Force in Contactless Integration
    • Advertising Spend of Major Credit Card Marketers
      • Table Top 5 Megabrand Ad Categories, Ranked by Total Measured U.S. Advertising Spending for First-Half 2005 Versus First-Half 2006 (in million $)
      • Table Selected Financial Services Companies, Ranked by Total Measured U.S. Advertising Spending, First-Half 2005 Versus First-Half 2006 (in million $)
      • Table Financial Services Companies in Advertising Age's Top 200 Advertisers, 2005
    • Selected Smart Card Marketing Initiatives
      • Many Marketers Still in the Pilot Plan Stage
      • MasterCard Highlights Fun and Function of PayPass
        • Table Top 10 Preferred New Television Advertisements, Airing February 5-March 4, 2007
      • MasterCard PayPass at a Sports Venue Near You
      • MasterCard Sweepstake Offer Specialized for PayPass Users
      • Smart Cards and Small Business Card Market
      • Visa Launches Prepaid Contactless Program
      • Visa Brings Life into Play
      • Visa Feels Consumer Pain with Lunch Spot
      • Consumers Urged to Blink with Chase VOD Campaign
      • Chase at Major League Ballparks
      • Beware the Backlash
    • Selected Smart Card Product and Design Innovations
      • Form and Function: Design Innovations
      • An Open Market for Ancillary Products
      • Purchase with a Flick of the Wrist in Taiwan
      • Technology Vendors Go Smaller
      • Manufacturing Innovations Focus on Security
      • Will Biometrics Replace Smart Card Technology?
  • Corporate Landscape and Profiles
    • Overview
      • Corporate Landscape and Significant Industry Events
      • Interchange Fee Suits
      • Senate Judiciary Committee and Interchange Fees
      • American Express and Discover Sue the Associations
    • Corporate Profiles of Credit Card Brands
      • Overview
      • A Note on Metrics
    • MasterCard
      • Overview
      • Performance
        • Table Estimated Total U.S. Revenues for MasterCard, 2002-2006 (in million $)
        • Table Key U.S. Metrics for MasterCard, 2002-2006
      • MasterCard's PayPass
    • Visa USA
      • Overview
      • History
      • Performance
        • Table Estimated Total U.S. Revenues for Visa, 2002-2006 (in million $)
        • Table Key U.S. Metrics for Visa, 2002-2006
      • Visa Contactless
        • Table Visa Small-Ticket Purchase Volume, 2000-2006 (in billion $)
      • Visa Tests Smart Card ID Waters
    • American Express
      • Overview
      • History
      • Performance
        • Table Estimated Total U.S. Revenues for American Express, 2002-2006 (in million $)
        • Table Key U.S. Metrics for American Express, 2002-2006
      • AmEx ExpressPay
    • Discover Financial Services
      • Overview
      • History
      • Performance
        • Table Estimated Total U.S. Revenues for Discover, 2002-2006 (in million $)
        • Table Key U.S. Metrics for Discover, 2002-2006
      • Discover's Contactless Program
      • Discover Tests Healthcare Waters
    • JCB International, Inc.
      • Overview
      • History
      • Performance
        • Table Estimated Total U.S. Revenues for JCB, 2002-2006 (in million $)
        • Table Key Worldwide Metrics for JCB, 2002-2006
      • JCB's Smart Card Program
    • Corporate Profiles of Banks and Other Issuers
      • Overview
    • Bank of America
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for Bank of America, 2004-2006
      • BofA/MBNA Contactless
    • JPMorgan Chase
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for Chase, 2004-2006
      • Chase Blink
    • Citigroup
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for Citigroup, 2004-2006
      • Citigroup's Contactless Partnership with MasterCard
    • Wells Fargo
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for Wells Fargo, 2004-2006
      • Wells Fargo and Visa Signature Contactless Cards
    • HSBC North America
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for HSBC, 2004-2006
      • HSBC Begins Full issuance of Contactless Debit Cards
    • Citizens Financial Group
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for Citizens Financial Group, 2004-2006
      • Citizens Becomes Largest Contactless Debit Card Issuer
    • Key Bank
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for Key Bank, 2004-2006
      • Contactless Debit Cards
    • GE Money
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key Metrics for GE Money, 2004-2006
      • GE Money Issues Meijer-Branded MasterCard
    • Advanta
      • Overview and Brief History
      • Performance and Other Key Metrics
        • Table Key U.S. Metrics for Advanta, 2004-2006
      • First Contactless Business Credit Card
  • The Consumer
    • Introduction to Simmons Market Research Bureau Data
      • Credit Card Brand Penetration
        • Table Consumer and Monthly Credit Card Balances, by Balance Carried, 2006 (%)
        • Table Household Penetration Rates for Major Credit Card Brands, 2003-2006 (%)
      • Credit Card Brand Monthly Usage Rates
        • Table Household Usage Rates for Major Credit Card Brands, 2006 (%)
      • Credit Card Brand Demographic Indicators
        • Table Demographic Indicators for Major Credit Card Brands, 2006
    • Financial Attitudes by Age and Household Income
      • Younger Consumers: Financial Insecurity and Immaturity
      • Consumers Age 55+: With Age Comes Awareness
        • Table Consumer Responses to Financial Attitudinal Statements, by Age, 2006
      • More Money, More Secure and Informed
        • Table Consumer Responses to Financial Attitudinal Statements, by Household Income (HHI), 2006
    • Consumer Reaction to Contactless
      • Issuer Tests and Trials Provide Insights Into Consumer Acceptance
      • Are More Consumers Ready to Embrace Contactless?
      • Adopters Most Likely Young and High Income
      • Fast and Easy, Once Consumers Learn About It
      • MasterCard Study Points to Shifting Consumer Behavior
      • Consumer Point of View on BioPay
  • Selected Addresses of Players in the Contactless Market
    • Bankcard Associations and Issuers
      • Smart Card Component Suppliers

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