Contactless Commerce Enables a

Executive Summary
 
More than 10 million new payment cards issued in the U.S. in 2005 support contactless
transactions, and the number of cards keeps growing.  As contactless commerce gains
acceptance, card issuers seek to extend the technology to alternate form factors such
as key fobs, which offer greater convenience to consumers and can be personalized for
individual tastes.  One form factor that holds great potential is the mobile phone, which
can readily support contactless payments and may eventually serve as a complete
financial platform.  However, many issues concerning the manufacture and distribution
of alternate form factors must be resolved before they can be widely deployed. 
Consumer acceptance presents another significant challenge.  Will people feel as
secure with other credit and debit items as they do with cards? Early trials will reveal
much about the market for these new physical forms of payment technology.