Visa CEO forecasts ‘significant contactless growth’ in the US

Visa CEO Alfred Kelly
KELLY: “One in four domestic face-to-face transactions that run over our network globally are now contactless”

“The US market is poised for significant contactless growth over the coming year,” Visa CEO Alfred F Kelly has told analysts. “We expect that there will be over 100m Visa contactless cards issued in the United States by the end of 2019.”

“On the issuing side, several of our largest clients will begin issuing contactless cards over the next few quarters,” Kelly explained during the payments network’s Q4 2018 earnings call.

“On the acceptance side, in the past three months several of the largest merchants have enabled contactless in their stores, including 7-Eleven, CVS Pharmacy stores, and Costco.

“Over 70 of the top 100 merchants by transactions now accept contactless, an increase of more than 20 in the past year. Additionally, over half of all face-to-face transactions now occur at a contactless-enabled merchant, up from over a little bit around one-third of all merchants a year ago.”

“Costco is a good example of the potential impact when both the issuing and acceptance come together, since the Citi-Costco co-brand card is contactless-enabled. Over half of in-store payments at Costco on their co-brand card are now paid with a tap after Costco enabled contactless payments just in mid-August of this year.”

International contactless adoption continues to grow rapidly, Kelly added, “as it is a better consumer and merchant experience than paying with a dip, swipe, or scan.

“One in four domestic face-to-face transactions that run over our network globally are now contactless. If you exclude the United States, domestic contactless penetration is over 40%, which is up over 12 percentage points in the last year and up almost four points versus the last quarter.

“More than 20 countries have increased their domestic contactless penetration by more than 20 points since last year, led by Russia, which is up 38 points to over 50%. During the Fifa World Cup, contactless payments accounted for 45% of all Visa purchases across the 11 host cities in Russia.”

QR code payments acceptance and cardholder usage points “is progressing very well,” Kelly also said during the call.

“India is our largest market, where we now have over 700,000 scan-to-pay acceptance points.

“But we’re also seeing momentum in a number of markets in the CEMEA region. In Tanzania this quarter we signed a deal with Halotel, a leading mobile network operator, to put Visa credentials into their mobile phone wallets.

“We also launched scan-to-pay in Pakistan with HBL, the country’s largest issuer and acquirer, with 50,000 consumers being enabled in the first few days. And they have plans to make the solution available to almost one million customers and thousands of merchants in the coming months.

“In Kazakhstan, we partnered with a leading mobile network operator to introduce cashless ticketing in 3,000 public transport buses across four cities.”

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