Preparing The Business Case >>

Benefit Identification

2. Increased Revenue

As with any payment card, when consumers pay using Contactless technology instead of using cash, they tend to spend more and to spend more frequently. In addition, the retailer supporting Contactless payment tends to become the customer’s preferred retailer. Increased average transaction value, increased transaction frequency, and increased loyalty can all translate directly into increased revenue. Acquirers should be able to give an indication of the increase in revenue that other retailers have experienced.

>> Uplift in Average Transaction Value (ATV)

There is potential for uplift in ATV, which is largely due to the removal of constraints imposed by the amount of cash the customer has on their person. Cardholders are not limited by the amount of cash in their wallet or purse - they can spend what is available on their card account without the need to pre-pay or load value.

It should be noted that there are some retailers for which the size of each transaction is more static, such as in the transport sector – so the 'halo' effect would be negligible. On the other hand, for vending machines the replacement of coin also provides the opportunity to sell higher value goods, and where these have previously been limited by coin denominations there is the opportunity for more flexible pricing. 

>> Uplift in Footfall

It has been seen that where a retailer has implemented Contactless technology, they become the preferred retailer for Contactless card users – especially at times when they are limited by cash availability.  

In addition, certainly for the early adopters, there is the potential to attract those with Contactless cards as new customers by use of appropriate window signage indicating Contactless acceptance. Point-of-sale and window display material designs are available on this site.

>> Increase in Transaction Frequency

As with all card payments, consumers tend to spend more frequently than when paying with cash. Focus groups indicate that consumers regard using cards for transactions of £15 or less to be more acceptable when using Contactless payments. The added advantage of Contactless cards is that the customer is not constrained by the cash they have on their person. The result is both a reduction in the number of abandoned purchases and an increase in the number of impulse purchases.

Acquirers should be able to give an indication as to the percentage increase in transaction frequency that could be expected (see links to participants).