MILFORD, Conn. -- Contactless payments are about to get a whole lot more prevalent. Subway is planning to begin accepting MasterCard PayPass contactless payments at more than 7,000 U.S. stores. Guests will be able to pay by tapping their card, phone, key fob or other device on new payment readers.
As of the second quarter of 2011, nearly 100 million PayPass-enabled cards and devices have been issued worldwide. MasterCard's PayPass technology is used at 341,000 merchant locations worldwide. But the investment hurdle for retailers remains high.
PayPass has grown in popularity in places where speed and convenience are important, such as sports stadiums, supermarkets, quick-service restaurants and taxis. MasterCard’s program further speeds up the transaction by forgoing signature requirements for purchases under $50.
To enable smartphone purchases, MasterCard teamed with Google to build PayPass compatibility into Google Wallet. The customer must add a MasterCard payment method (such as a credit card) into the Google Wallet app so it can access funds.
According to Internet Retailer, Google Wallet is available only with Nexus S 4G phones sold through Sprint, and 400,000 to 500,000 of those phones have been sold. Google is not disclosing the number of Google Wallet accounts.
Other companies, including Visa Inc., Isis and American Express Co.’s Serve, are close behind with their own programs.
Along customer acceptance, contactless and mobile payment faces the hurdle of high investment costs for merchants. An NFC-compatible payment terminal may cost $400 to $500, according to Internet Retailer, making Subway’s move a potential $2.8 million investment. Subway would not disclose the company’s cost.
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