Just recently, Centre for Budapest Transport (BKK) announced plans to introcued the PayPass payment option at the new TVMs in Budapest, marking a significant step in the promotion of such payments. To what extent are these cards widespread in Hungary today, and why?
BKK operates 60 ticket and pass machines in Budapest that allow for PayPass payments and it plans to expand the number to 300 by the beginning of 2015, making the process faster and simpler. The Chief Executive Officer (CEO) of BKK Dávid Vitézy said it is a spectacular development for public transport users. Previously, passes could be purchased in the capital at 90 places, and only 50 of these allowed for bankcard payments.
MasterCard PayPass is a payment feature that can be added to any MasterCard payment account to enable payments with a simple tap. PayPass is flexible enough that it can be built into cards or other devices such as key fobs, and can be used in markets that primarily issue smart cards or those that primarily issue magnetic stripe cards.
PayPass solves queuing. Its advantage over regular bankcards or cash is rapidity, as contactless card payments take only five seconds. In Hungary, PayPass enables customers to make payments up to HUF 5,000, thus it can be convenient and time-efficient for low-value purchases.
While paying by PayPass, customers are not required to hand over the card to the cashier and use a PIN code; instead, it is sufficient if the cardholder holds the card to the terminal. Over HUF 5,000 the cards can be used as regular – PIN code-based – bankcards. Apart from public transport, PayPass can be used in businesses such as restaurants, cafes, chemists, news-stands, supermarkets and cinemas.
The Hungarian National Bank says PayPass credit cards have seen a significant rise in popularity in the past year, tripling to 1.76 million nationwide. The number of PayPass payments increased tenfold in Hungary between 2012 and 2013.
Budapest Bank research indicates that the number of cardholders is expected to rise significantly in the coming years. PayPass is becoming better known among the population: while 80% of respondents had already heard of this payment method, 30% had precise knowledge of how it operates.
The research also revealed that PayPass cards tend to be more popular among graduate men with higher incomes and that contactless cards are favoured by their owners, 60% saying they prefer it over regular bankcards or cash.
There is a growing number of PayPass terminals: according to MasterCard, one in every five businesses accepts contactless credit cards, which means that there are nearly 20,000 terminals in Hungary which accept PayPass.
Data suggests that PayPass payments and terminals will continue to rise and could surpass regular bankcard payments within a few years.
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