Visa USA Launches First Prepaid Contactless Program

Visa USA today announced the launch of 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. MetaBank will be the first financial institution to issue the cards.

Beginning December 2006, the Visa Contactless prepaid cards became available to clients of Meta Payment Systems®, MetaBank’s prepaid card division. Like all Visa prepaid products, the Visa Contactless prepaid card can 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 line – in areas such as the underserved, healthcare and government disbursements – have fueled tremendous growth for Visa’s prepaid category and paved the way for continued innovation," said Todd Brockman, senior vice president, prepaid products, 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."

Contactless Momentum Continues

Visa’s Contactless platform was designed with the flexibility to accommodate a full range of products – including credit, debit and prepaid – as well as nontraditional forms of payment – such as mobile phones and other handheld devices. Visa Contactless has enjoyed one of the fastest deployments in Visa history and is now a feature found on more than 6 million cards worldwide. In the U.S., more than 30,000 merchant locations accept contactless payments. 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 volume – that is, the amount spent by consumers using the contactless feature – has grown an average of 34 percent per month over the last fiscal year, with the average transaction worth nearly $17. For the same time period, the number of Visa Contactless transactions has grown an average of 34 percent each month.<!–PAGEBREAK–>

Visa Contactless prepaid provides increased speed and convenience at the point of sale, making the cards ideal for high-volume, small ticket merchants and their customers. With no signature required for purchases under $25, Visa Contactless transactions are up to 25 percent faster than cash transactions, enabling consumers to speed through the checkout line and allowing merchants to serve more customers during peak periods. 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 percent of consumers stated they use their payment cards for small ticket purchases more frequently than they did three years ago, citing convenience (73 percent), efficiency (44 percent) and speed (39 percent) as key factors behind their payment choices.