Thomas Jean Pierre WiechertThe Economics of Contactless Payment

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A number of retailers have begun to test and/or roll-out contactless payment technology. Other companies, from various industries, have united in the NFC Forum to integrate this contactless technology into mobile devices, such as mobile phones. This commonly developed technology, referred to as "Near Field Communication” (NFC), enables mobile devices to be used as replacements for physical cards (for example payment cards and electronic tickets). Despite these commitments, the business case for contactless technology and NFC is still unproven.

This thesis, which is focused on contactless payment in retail stores, aims at providing a realistic perspective on the potentials of NFC that takes existing customer shopping processes and current payment cost structures into account. So far, research in this area is limited. The thesis deals with the question of whether the adoption of NFC will be beneficial to stationary retailers. To answer this question, the thesis first looks at the way that payments are currently settled in retail stores and provides an introduction to contactless payment and NFC. After this, it provides an analysis of the influence of NFC-based applications on the customer shopping process and an assessment of how retailers evaluate the technology. The former was confirmed by means of interviews with retailers, while the latter is the result of a questionnaire-based survey amongst European retailers. A mathematical model is then proposed to evaluate the financial impact that the implementation of new payment technologies, such as NFC, would have on stationary retailers. The model is then employed to evaluate actual point-of-sale data provided by four Swiss retailers. This data, and its evaluation with the help of the mathematical model, provides insight into the financial impact that the implementation of contactless and NFC-based payment services would have on stationary retailers.

Overall, the results of the research suggest that NFC technology may benefit retailers and their customers by increasing customer convenience and accelerating the check-out process, thus reducing annoying waiting lines. A successful introduction of NFC-based services does however require fee structures beneficial to all stakeholders.

Ihr Werk im Verlag Dr. Kovač

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