[Dave Birch] We all know how bullish the analysts are about the mobile/contactless nexus. While technology issues and uncertainties around business models between operators, payment networks and banks will act to slow momentum, Strategy Analytics forecasts that mobile phone based contactless payments will facilitate over $36 billion of worldwide consumer spending by 2011. Meanwhile, over at Javelin, Bruce Cundiff said that “contactless payments will take off when issuers incorporate the payment mechanism into a mobile phone or other portable electronic device“. The two technologies are becoming entwined: the contactless infrastructure being deployed for cards is going to pull mobiles with contactless interfaces (eg, NFC) into the marketplace. (Check out Nokia’s YouTube effort.) What’s not to like about the combination?

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Customers certainly like contactless. In a recent survey of a group of U.S. consumers, 13 percent had already used contactless payment and 95 percent those said that it was easy and quick. Comfortingly, 84 percent of those who had tried it said it was as safe or safer than credit cards. It’s still early days of course, and overall the picture remains mixed:

I’ve talked with clerks on the spot at stores that use contactless readers in Connecticut, and their responses really varied. Some said that a third of all card transactions are now contactless; others said, ‘You’re the first person I’ve ever seen use it.’

This is, surely, just the usual uneven distribution of the future and I’m sure that not only will contactless be successful but that contactless and mobile will be even more successful. If contactless mobile payments catch on as forecast, then they will have another impact because they will condition millions of consumers to to perform point-of-sale transactions on their cell phones. These will start off as simple, small payments for a coffee or something but will surely extend (provided the convenience is maintained) into much more sophisticated services — such as loyalty, coupons and so on — and then into services that exploit the fact that they’re in a phone, not in a piece of plastic (ie, services with location awareness, connectivity). Mobile and contactless is a big, big deal.

By the way, did I mention that I’m running a workshop about this sort of thing in Amsterdam in a few weeks time?

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