Feb 15, 2007

Why are Visa, MasterCard and American Express all scrambling to announce contactless deals with a tiny coffee shop chain?

I was surprised a few days ago when Visa, American Express and MasterCard each issued separate press releases, all on the same day, announcing three individual contactless deals with a tiny coffee shop chain in the western United States, Tully’s Coffee, a retailer with 100 stores and $50 million annual revenue. In comparison, Starbucks is 150 times as big. Why so much excitement from all three payment brands about such a tiny player?

“Tully's Coffee and Visa today announced their collaboration to make it easier for customers to grab their coffee and go by accepting Visa Contactless payments, an innovative new payment technology that speeds up transactions, making purchases faster and more convenient than cash transactions.”

MasterCard Worldwide and Tully’s Coffee Corporation announced today that all Tully’s corporate owned retail locations will accept MasterCard® PayPass™. MasterCard PayPass is a fast, cashless payment option that will allow customers to pay for their Tully’s purchases by simply tapping their PayPass-enabled MasterCard card or device on a PayPass reader.”

American Express today announced Tully's Coffee Corporation, Inc. as the latest merchant partner to accept ExpressPay from American Express in the quick service category.”

I can understand the importance of signing up lots of small merchants, and Tully’s is probably a good one to have on board. But three separate Visa, American Express and MasterCard press releases issued on the same day for a deal with a $50 million retailer? What’s that all about?

The banking and card technology press talks about contactless like a done deal. Industry consultants and experts talk of massive contactless deployments (one company recently published a report claiming that contactless payment systems are “approaching the tipping point of adoption in retail”). If that’s the case, why so much excitement about contactless acceptance at a $50 million a year retailer?

2 comments:

CreditEducator said...
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Opra said...
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