SAN FRANCISCO -- Visa USA has launched its first contactless prepaid cards, providing consumers a faster and more convenient way to pay and offering merchants increased revenue opportunities, increased throughput and improved customer loyalty. Storm Lake, Iowa-based MetaBank will be the first financial institution to issue the cards.
Beginning this month6, the Visa Contactless prepaid cards have become available to clients of Meta Payment Systems, MetaBank's prepaid card division. Like all Visa prepaid products, the Visa Contactless prepaid card can [image-nocss] be used everywhere Visa debit cards are accepted, offering consumers a more secure, cost-effective and convenient alternative to cash and checks.
The new Visa Contactless prepaid cards are embedded with a radio-frequency chip that allows consumers to make a contactless transaction by holding their card in front of a reader at checkout, instead of swiping it or handing it to a cashier.
New product distribution channels at retailers and financial institutions, and an ever-expanding product linein areas such as the underserved, healthcare and government disbursementshave fueled tremendous growth for Visa's prepaid category and paved the way for continued innovation, said Todd Brockman, senior vice president of prepaid products for Visa USA. Adding the contactless feature to prepaid cards offers Visa and our stakeholders the opportunity to capture an even greater share of cash and check spends while responding to consumers' continued desire for innovative electronic payments.
Visa's Contactless platform was designed with the flexibility to accommodate a full range of productsincluding credit, debit and prepaidas well as nontraditional forms of payment such as mobile phones and other handheld devices.
Consumer adoption of Visa Contactless has led to impressive growth, especially in the area of small-ticket purchases, defined by Visa as those under $25. Visa Contactless volumethat is, the amount spent by consumers using the contactless featurehas grown an average of 34% per month over the last fiscal year, with the average transaction worth nearly $17, Visa USA said. For the same period, the number of Visa Contactless transactions has grown an average of 34% each month.
With no signature required for purchases under $25, Visa Contactless transactions are up to 25% faster than cash transactions, enabling consumers to move through the checkout line faster and allowing merchants to serve more customers during peak periods, said Visa USA.
Visa acceptance in emerging segments, including quick-service restaurants and convenience stores, continues to grow due in large part to consumer demand and usage habits. According to an April 2006 Visa survey, 45% of consumers stated they use their payment cards for small-ticket purchases more frequently than they did three years ago, citing convenience (73%), efficiency (44%) and speed (39%) as key factors behind their payment choices.
As even the smallest purchases migrate to plastic, Visa remains focused on developing products that provide benefits for our cardholders, merchants and member financial institutions, said Brian Triplett, senior vice president of emerging product development at Visa USA. Looking toward the future, Visa will enable more form factors with the contactless feature, like mini cards and mobile phones, ensuring Visa-branded products deliver the speed and convenience of contactless payments regardless of your interests or lifestyle.
Separately, Visa USA said it will offer $20 million in financial incentives and create new sanctions in an effort to further merchant compliance with the Payment Card Industry Data Security Standard (PCI DSS). The new effort, called the Visa PCI Compliance Acceleration Program (PCI CAP), is the first of its kind to provide positive reinforcement to the industry's traditional, fine-only approach.
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