Study Finds MasterCard PayPass Customers Spend More

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MasterCard PayPass

Source: MasterCard PayPass

MasterCard’s PayPass contactless payment system is proving to be a successful evolution in personal credit.

This is evident in recent statistics that show MasterCard PayPass users spend approximately $600 more per month with the contactless credit card system.

A recent study authorized by MasterCard Advisors found that consumers with the MasterCard PayPass contactless credit card system appear to charge more to their MasterCard credit card account every month than customers who use traditional credit cards. 

The study suggests that MasterCard customers will not only spend more money in a given month but it is that they are willing to use the contactless payment system across several different usage categories. This indicates, then, that credit consumers are, indeed, more willing than ever before to make the transition to the more efficient contactless card system and avoid using cash or other payments forms.

The research performed by MasterCard Advisors followed two groups of MasterCard account holders to monitor their spending over several months. The first group consisted of account holders who started using PayPass-enabled MasterCard credit cards around the beginning of 2009. 

The second group was a basic control group who continued using a traditional credit card for the duration of the study.  Both groups were tracked over the same periods of at least four months prior to the beginning of the official study in order to qualify any changes in spending once the study began as a result of the experiment. Of course, this helped to identify the changes and better determine what might have influenced them in the long run.

According to Mark Burnett, spokesman for MasterCard Advisors, reported that the findings of the study indicate a kind of “halo effect” for the new contactless card payment system. Further research conducted separated the survey group into three sub-categories based on monthly spending and found consistent increases in spending across all categories.  They recorded an increase of $600 in PayPass spending in the highest expense group. This shift was also present in online purchases and travel purchases also.

Researchers also found that the EMV chip technology that is popular in Europe and Canada, a technology that is very similar to that of contactless credit cards, may be somewhat responsible for the spike in use. The reason for this is that foreign merchants are quite vocal about their preference for the much more secure payment format, resulting in more cross-border transactions. 

MasterCard Advisors executive Jonathan Orndorff, then, told reporters that the study suggests U.S. merchants will probably learn from Canada’s success with the system.  This is especially relevant as the United States gets closer to the 2017 deadline for fully adopting the EMV technology as, at the very least, a component of the economy and the various point-of-sale systems therein.

This 2017 deadline is necessary because credit card issuing institutions in the United States have been quite reluctant to adopt the EMV technology. American credit card issuers claim that they prefer to rely the real-time authorization tools and fraud detection systems that come along with traditional credit systems instead of reinventing the wheel, so to speak, and improving card security with the new contactless payment technology. 

What this MasterCard Advisors study shows, however, is that banks and merchants in the United States can equally benefit from the incorporation of contactless payment systems. Obviously, there is more profit in it for merchants but they may eventually earn more in fees and revenue to pay for the cost of redesigning their systems to accommodate EMV technology. Of course, this also benefits consumers as they are comfortable spending a little more due to the increased convenience.

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