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Visa sees more potential for mag-stripe than contactless

April 18, 2006

Digital Transactions:Visa USA's program announcement to foster card transactions in the growing category of small-value payments would, at first blush, seem to be the network's answer to offering incentives for the emerging technology of contactless payments. A Visa spokeswoman, however, says the new small-value program, which includes interchange breaks and leeway for transactions without cardholder signatures, covers only swiped transactions, even though contactless is aimed at businesses with average tickets in the small-value range. The spokeswoman did not elaborate, but observers say Visa sees more potential for further penetration of magnetic-stripe credit and debit cards into the sub-$25 payment category. At the same time, they say, contactless payments seem to be gaining traction on their own, with about 25,000 merchant locations signing on over the past year and 13 million contactless payment devices being issued over the same time.

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