Performance Insights
Back

MasterCard® PayPass™ Performance Insights

MasterCard PayPass Performance Insights reports current performance metrics and general statistics (generated from transactions processed by MasterCard. The in-depth analysis demonstrates the positive impact PayPass delivers to our customers’ business.

 

 

MasterCard Is Leading The Industry
As of March 2011, more than 92 million MasterCard PayPass cards and devices have been issued for use at approximately 311,000 merchant locations worldwide, including new acceptance environments such as vending, taxis, tollbooths, transit, football/baseball stadiums and golfing events.

In addition to robust deployments at major merchants in the US such as McDonalds, 7-Eleven, CVS, Duane Reade, Sheetz, Hess, Wegmans, The Home Depot, Best Buy, Gulf Oil, Sports Authority, BJ's, Meijer's, Whataburger, Tim Horton's, Shop-Rite, Foot Locker, Sunoco and BP. PayPass has been rolled out in 37 countries. Outside the US, PayPass speeds consumers through the checkout process at  McDonald's (US, Poland, UK), Burger King (Turkey, UK), 7-Eleven (Australia), Starbucks (Turkey, Malaysia, UK), Petro-Canada (Canada) Tim Horton's (Canada), Boots (UK), Tesco (UK), Carrefour, Cora and Intermarche (all 3 in France) and in many other types of merchants including supermarkets, cinemas, gas stations, fast food and transit.
MasterCard PayPass Grows Profitability

MasterCard PayPass demonstrates an economic benefit to issuers. Cardholders that use their PayPass card make it their preferred card. Clear cardholder communications that teach cardholders how and where to "Tap" the card at participating merchants is a key driver for success.

Proven Economic Benefits

A recent collaborative effort across MasterCard Advisors, Marketing Intelligence and Planning and Global PayPass Solutions examined the PayPass influence on MasterCard consumer accounts in 2009 and 2010. The analytics demonstrate that PayPass accounts[1]  are amongst the most profitable MasterCard segments.

PayPass accounts demonstrate a greater tendency to achieve "top of wallet" consumer preference [2]  :

- 65% of PayPass consumer credit accounts and 63% of PayPass consumer debit accounts are top of wallet.

PayPass accounts increase and maintain higher average spend per account than non-PayPass accounts:

- 41% YOY net lift in spend among newly tapping consumer credit accounts .

- 40% YOY net lift in spend among newly tapping consumer debit accounts .

- 67% net increase in spend for PayPass accounts versus swipe-only accounts among existing high-spend account segments .

- 3.3x and 2.0x higher spend than overall consumer credit and debit respectively.

- Voluntary attrition for PayPass accounts is 11% lower than that for non-PayPass accounts[3] 

- In addition, PayPass-deployed mechants continue to realize a powerful performance benefit in the form of double and triple digit quarterly cumulative growth in tapped transaction frequency. They have also seen net double-digit advantages in swiped transactions and spend versus merchants that are not-PayPass deployed.

PayPass moves transactions from cash to card

- Approximately 52% and 75% of PayPass Transactions are under $25 and $50 respectively - $2.9 trillion cash purchases (2010)[4]  - that is the global cash displacement opportunity.  Consumer preference for PayPass over cash continues to grow the card industry's share of low value payments.

PayPass expands where cardholders choose to shop for everyday purchases and how much they spend on these purchases

- PayPass expands where cardholders use their card - As more consumers carry PayPass, acceptance at new merchants is growing in step - PayPass is clearly gaining ground and fast.

- Cardholders use PayPass at merchants that mostly accept cash - Consumer card volume grows because purchases are no longer limited to cash on hand.

The Key Is To Get Cardholders To Tap

MasterCard sees a direct correlation between portfolio profitability and cardholder awareness of MasterCard PayPass - Following marketing and communications best practices helps maximize PayPass issuers' profitability and shows markedly different results from those that did not. The best practices include:

  • Consumer Education - Communicate simply and often. Teach them where and how to tap;
  • Training - Training the branch staff and call center staff on where and how to use PayPass and distribute FAQs;
  • Card Design - Display PayPass prominently on the card front.

For more information, please contact your MasterCard Worldwide sales representative or send an email to paypass@mastercard.com

[1] PayPass accounts = accounts with one or more tapped transactions in a designated performance period

[2] Top of wallet= 12 months active (one or more transactions/month for 12 consecutive months)

[3] Attrition is measured as the percentage of accounts that became inactive for six months (this is the standard definition used by MasterCard Advisors)

[4] Source: Data Monitor (2010)

Lift calculations are derived from a subset of PayPass-enabled debit and credit cards that leveraged the PayPass technology [i.e., tapped] in the current performance period and had observable non-tap activity during the same performance period in the prior year.