NEW YORK (MainStreet) — Does the simple act of handing your credit card over to a cashier, or at least swiping the card in a scanning device at the register save you money?
In a strange way, yes it does – at least in a relative sense.
A new study from MasterCard Advisors says that credit card consumers who use “contactless” card transactions (where the consumer waves the card, or more recently, even a smartphone, over a payment terminal) tend to spend more money using their credit card than do card “swipers”.
From a technology sense, contactless cards save consumers time by avoiding the task of running the card through a magnetic stripe reader.
Swipe-free cards are embedded with a special microchip and radio signal that links the card and the payment terminal to quickly and accurately record the purchase. The payment device, in turn, contacts the bank that issued the credit card to okay the transaction. A receipt is generated and the consumer walks off with his or her purchase – all within a matter of seconds.
Contactless cards are becoming more ubiquitous, with MasterCard (PayPass); Visa (PayWave) and American Express (Express Pay) all hitting the market recently, and consumers are apparently getting the hang of using swipe-free credit cards.
Expect those companies to ramp up their contactless card campaigns if MasterCard has its data correct.
According to MasterCard, consumer spending rises 30% among contactless card users when compared to consumers who swipe their cards at the register. The data doesn’t tie any obvious differences between the cards to the disparity. After all, waving a card only saves a few seconds compared to swiping.
But the novelty alone may account for the spending increase, as MasterCard says that 30% figure comes in the first 12 months of owning a contactless card.
Another possible reason: MasterCard indicates contactless credit cards are the “top of the wallet choice” among consumers, presumably for their ease of use and faster payment completion capabilities.