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How much will consumers be prepared to spend with their NFC phones per transaction and overall?

OPINION: In most countries, the maximum transaction limit for a contactless payment is set low enough that only small items such as cups of coffee and bus tickets can be purchased. That may not, however, be what consumers want — and it could be leading to the potential revenues from NFC payments being seriously underestimated.

The 100 people testing NFC at BYU-Idaho University have been merrily spending up to $1,600 at a time. And, as we’ve found from our research for The NFC Report, Korea’s highly successful mobile payments system lets consumers spend over $400 per transaction on their mobile phone — with no PIN required.

Yet, in most countries, the maximum transaction amount for contactless card payments — and, by association, payments via near field communication — is being set at many times less than that. Here in the UK, it’s been set at £10, or about US$16.

Clearly, there are security issues that can make it sensible to keep transaction limits down. In doing so, though, the potential market for NFC payments is also being restricted — perhaps unnecessarily — to low value items.

Now Visa Australia, in the process of rolling out contactless cards, has broken ranks. It has decided that confining contactless payments to cups of coffee and transport tickets is not the way to go and has increased the transaction limit to A$100 (US$87) — enough, at least, to fill up the car with fuel. And, perhaps, enough to make a significant impact on how much consumers spend on contactless transactions overall, and on the business case for NFC.

Sarah Clark, Editor

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