Contactless payments replace both chip and pin along with cash

Abstract

The near field communication (nfc-) technology has been available for quite some time, and we have predicted its triumph already for years. Introducing new technology in two sided markets is tricky. Two sided markets mean that both sides of the market – in this case the consumers who make the payments as well as the merchants who are the payees, must have sufficient preparedness to use new technology before its adoption becomes profitable. In Finland, some retail chains had latent nfc implemented in their payment terminals, but hesitated to start accepting nfc payments as the penetration of nfc-enabled payment cards was still too low. As there were very few nfc-enabled payment terminals, payment card issuing banks didn’t have the incentive for a big bang renewal of plastic, but provided nfc-chip cards to their customers gradually, in accordance with the normal renewals. Hence, the high expectations took 4–5 years to realise. Year 2017 shows, that nfc is really taking off in the Finnish market.