March 28, 2007

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  NEWS: Canadian Chain to Go Contactless

  Tim Horton's, a coffee and donut chain that boasts more locations in Canada than McDonald's, has made a big step towards the fast food future by announcing that it will soon introduce contactless card payment technology in its stores. Contactless technology is in its infancy in Canada, so the announcement from such a large chain –Tim Horton's owns just under 2,800 stores across Canada - is real news, to say the least. The move is a pioneering step for the technology, which has yet to really take off in North America.
  
  UBS analyst Peter Rozenberg states that contactless payment stands to cut 5-10 seconds off the time of a "standard" credit card transaction, as no signature is required for purchases under $25. The customer simply taps their card against the contactless reader, generating a receipt for small purchases. The move stands to increase Tim Horton's sales by up to 3% over the next two years. Rozenberg believes that contactless technology is the push that credit cards need to surpass cash as the predominate form of payment. And the acceptance at Tim Horton's stands to be huge. The chain has a huge loyalty base, with about 46% of customers coming in at least once a week, and some 1.7 billion transactions made in Canada yearly.
  
  Experts seem to think that the next five years are going to see a real contactless boom in Canada and America. A 2006 Ipsos Reid and Peppercoin survey reported that 100 million Americans would use contactless payment for such low-cost items as fast food and bus/train fare. The continued growth of prepaid debit cards and gift-style credit cards is another factor that is expected to have a continued impact on plastic's growth.
  
  
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