By

Credit cards have all sorts of features like points and miles that can entice consumers to use them. While studies have shown that credit cards in general can encourage people to spend more than if they were just using cash, can the technology within a credit card also change consumer spending?

MasterCard Advisors recently found that people who have credit cards with contactless technology spend more money than those that have cards with magnetic stripes. In its first PayPass Adoption Study released this month, it found these cardholders could spend up to 30 percent more on average.

MasterCard Advisors' PayPass Adoption Study takes a quantitative look at consumer transaction behavior in the U.S. after getting a card with contactless technology. A contactless credit card contains a chip that a person can hold over a reader in order to pay for a purchase. This speeds up the purchasing process compared to a traditional credit card with a magnetic stripe that must be swiped by a merchant in order to complete the payment process.

The study looked at 15 months of payments behavior dating back to July 2009 and compared account behavior between two segments of U.S. accounts for a one-year period for three types of card users: low spenders who charged $0 to $400 a month, medium spenders charging $500 to $1499 monthly, and high spenders with $1500 or more of spending in a month. It found that once cardholders got contactless cards and used them for their first tap payments, within 12 months those accounts had an increase on spending that was almost 30 percent more on average. The study also found a connection between adopting a contactless card and showing a distinct preference for a particular card in a wallet, with contactless technology perhaps driving people to use a contactless credit card more often.

The research analysts also discovered that prior credit card usage didn't have much of an effect on how a person would behave with the new technology. Whether the cardholder was a low spender or a high spender, he would spend about 30 percent more when using a contactless card. "In our highest spend segment, this lift translates into approximately $600 per month in incremental spend," said Jonathan Orndorff, principal at MasterCard Advisors and study lead, in a statement.

While consumers who have contactless cards may need to be more mindful of their purchasing behavioral patterns, the study results may be good news to business owners who have been on the fence about investing in the technology necessary to accept contactless payments.

"The research shows that even after cardholders use contactless only once, there is a clear halo effect," said Mark Barnett, group executive, consulting services for MasterCard Advisors, in a statement. "Contactless should be considered by any issue seeing to capture share today while establishing a platform for the future migration to mobile commerce."

The push to mobile payments, or paying with a transaction via Near Field Communications technology on a NFC-enabled smartphone, has been in the making for some time, but adoption has been slow. Even though phones may have been enabled with the technology, places where it can be used have been few and far between. In fact, the slowness with which this technology is being adopted has pushed phone makers to resist adding the technology to new smartphones, delaying the implementation of this payment form on a large scale.

With the results of this study, businesses and card issuers can see the potential benefits to their bottom lines by having contactless payment processing options. "Lifts in not just overall spend but the quality of spend also help the business case for contactless," said Orndorff.

Whether or not this data will be a tipping point in the advancement and adoption of mobile payments remains to be seen, but it does show what effect contactless technology can have on consumers.