With its super-size reputation and can-do attitude, anything the US does, it does big – and that’s certainly true when it comes to embracing mobile and contactless technologies. 

The world’s only remaining superpower is the third largest country by size (after Russia and Canada) and by population (after China and India).  Regarded as the largest and most technologically powerful economy, the US had a GDP per capita of US$48,100 in 2011.

Like many of the world’s economies, the US suffered during the global economic downturn and was knocked heavily by the sub-prime mortgage crisis and a raft of investment bank failures. Plummeting house prices and tight credit have characterized its recession, which lasted from mid-2008 until the third quarter of 2009, the longest decline since the 1930s.

But despite the economic gloom, its telecoms sector has continued to innovate with many of its Mobile Network Operators (MNOs), including Verizon Wireless, AT&T Mobility, Sprint Network and T-Mobile, active in the NFC market, sometimes working in coopetition to drive developments. By 2010 the country boasted 151 million land lines and 279 million cell phones.

A number of market surveys published in 2011 revealed how the contactless and NFC markets are shaping up in the US.

ABI Research reported a dramatic drop in contactless payment card shipments in the country. According to the firm, this was caused by the addition of the Durbin Amendment to  consumer protection law. This capped interchange fees and resulted in a cut in incentives for merchants to accept low-value transactions, such as contactless payments. It said a further factor was uncertainty about the US economy, which resulted in fewer bank card promotions and had a direct impact on demand for card products.

But a report by Parks Associates – ‘Mobile Payment: Technologies and Business Models’ – revealed that US consumers were enthusiastic about using their cell phones for money on the go. Its research found that 50% of US smartphone owners considered NFC-enabled mobile wallet applications ‘appealing’.

Financial services information provider VRL’s research, ‘Contactless Cards: Tentative Steps’, highlighted the disparity between the number of contactless cards in circulation and acceptance points. It estimated that there were 100 million of the cards in issue, but they could be used at just 2% of merchants.

A MasterCard survey found that 63% of US consumers aged 18-34 agreed they ‘would be at ease’ using cell phones to make purchases, compared with only 37% of those aged 35 or older. Among the 18-34 age group, 65% said they felt more ‘naked’ without their phones than their wallets, compared with 34% of those aged 35-plus.


The payments sector was the focus of activitiesin the contactless sector during 2011, with the unveiling of Isis and Google Wallet the main highlights.

The Isis joint venture created by AT&T Wireless, Verizon Wireless and T-Mobile is a national mobile commerce network. It was set up to enable users with USIM cards to access transit ticketing, mobile credit card, loyalty and mobile banking services.  The team behind Isis has signed up payment issuers such as JPMorgan Chase and Capital One as well as card schemes Visa, MasterCard Worldwide, American Express and Discover Financial Services. During the year Isis confirmed it would pilot a trial in Austin, Texas, and Salt Lake City, Utah, in 2012. The network also inked an agreement with the Utah Transit Authority (UTA) to introduce mobile payments to its transit system, on which travelers have been able to use contactless credit and debit cards since 2009.

The Google Wallet tap and go mobile app – which can be used for payments, coupons and rewards – was officially launched last year and has received the backing of more than 20 merchants, including Subway, Walgreens, Duane Reade, Toys ‘R’ Us, American Eagle Outfitters, Foot Locker, Guess, Macy’s, Bloomingdale’s, Peet’s Coffee & Tea, RadioShack, OfficeMax Jamba Juice, Chevron, D’Agostino and Gristedes Supermarkets, Pinkberry, and Faber news and gift shops. OfficeMax, for example, announced that it had equipped more than 100 of its 900 stores to accept payments, coupons and the chain’s loyalty program from Google Wallet. In addition, Subway confirmed it had started rolling out NFC payment terminals to more than 7,000 restaurants across the country.

The wallet can also be used at the 140,000-plus US merchants that accept MasterCard PayPass, including around 12,000 McDonald’s outlets.

New Jersey Transit became the first transit agency to support the app by accepting MasterCard PayPass transactions via the wallet.

Google launched the app on its Nexus S handset and confirmed plans to enable it on other Android NFC devices. The firm also revealed it was working with terminal vendors VeriFone, Hypercom, Ingenico and Vivotech. Other partners involved include Citi, MasterCard and First Data as well as MNO Sprint. The app also won the backing of Visa, American Express and Discover Financial Services, which agreed to work with Google to get their payment applications into future versions of the wallet.

During the year Google also announced plans to acquire Motorola Mobility, seen by some as a step towards driving the rollout of more NFC-enabled handsets.

There were a number of other developments and announcements in the US payments world last year. Visa unveiled a raft of pilots and deals, including contactless microSD card trials with major banks.

It also worked with U.S. Bank and Oberthur Technologies to release a dual interface payment card combining payWave, EMV chip and mag stripe technologies. The card is being marketed as the U.S. Bank FlexPerks Travel Rewards Visa credit card and is being issued to more than 20,000 cardholders who travel internationally.

To help prepare the US payment infrastructure for the arrival of contactless and mobile payments, as well as improve security and international interoperability, Visa unveiled a three-point plan to drive the adoption of dual-interface chip technology.  This also includes incentives for accepting contactless cards and NFC cell phone payments.

MasterCard linked up with U.S. Bank to launch the VITAband wristband, which combines the company’s PayPass technology with emergency contact and medical information, following a pilot of the system in several states earlier in the year.

Discover Financial Services announced plans for a pilot of the iCarte NFC-enabled iPhone attachment with 400-500 employees. Staff at the company’s HQ near Chicago as well as its regional office in Salt Lake City will be using the device, which is preloaded with its Zip contactless application.

Starbuck’s also made the news when it rolled out a mobile payment service at 6,800 of its stores. Although it opted for barcode technology rather than NFC, its move towards mobile was welcomed as laying the groundwork for NFC.


Cubic Corporation’s eAccess delivered more than a million of its Limited Use (LU) contactless cards to major US transport and building access customers for transit and non-transit applications. These include LA Metro, Port Authority of New York & New Jersey (PATH), South Florida, and San Diego Metropolitan Transportation System.


Demonstrating that contactless is about a lot more than transport and payments, NFC also hit the headlines in the advertising sector. During the year advertising agency staffers could tap their NFC handsets on smart outdoor posters in New York and Los Angeles to view trailers of a reality TV show and link directly to the show’s Facebook page.


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