Community Banks and the Contactless Economy: New Opportunities for Non-Interest Income

Contactless debit cards are gaining momentum with implications for community banks.  At the end of 2019, 11 percent of debit cards were contactless-enabled, according to the PULSE debit study. The figure is projected to be a whopping 87 percent by the end of 2022, according to the study. This growth is driven in part by merchant adoption of contactless technology, but a more compelling driver has been consumer demand. Customers who have seen or experienced the speed and effortlessness of tap-and-go soon find it cumbersome to do anything else and the pandemic conditions have only added a new layer of urgency to the demand for speedy, no-touch transactions.

To better understand these changes ABA worked with Discover®, interviewing community bank as well as merchants, to identify the revenue and customer relationship opportunities associated with contactless debit.

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