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Issue Date: Vol. 46, No. 1, January 2006, Posted On: 1/31/2006

Peppercoin Study Identifies Growing Cashless Demand

Nick Montano

NEW YORK CITY — A comprehensive study of the small-payments market was released at the Third Annual Micro and Small Payments Conference here. The survey found consumers’ desire to use credit and debit cards for small payments and micropayments, at the point of sale and online, is increasing steadily. An estimated 45 million Americans now are prepared to use credit or debit cards for purchases of $5 or less, up 23% from September 2004.

Only 7% of respondents who said that they would not use credit or debit cards for small payments explained that they find it easier, or prefer, to use cash rather than a cashless instrument.

The survey examined consumers’ spending habits for low-priced items. Its findings point to potential new markets for card use, Peppercoin said.

Consumers are interested in using credit and debit cards to pay for coffee and beverages, parking (meters, garage, lot), fast-food/corporate cafeteria items, vendible products, and the use of self-service kiosks.

The study was conducted by Ipsos Insight, a leading global survey-based market research company, and Peppercoin, a payments technology company. It was a scientific random-sample telephone survey of 1,115 Americans aged 12 and older.

“Over the past year, it has been increasingly obvious that there is a fundamental shift in the payments industry, as technology makes it easier for consumers to purchase everyday items in the manner of their choosing,” said Mark Friedman, president and chief executive officer of Peppercoin. “Peppercoin’s Small Payment Suite lets merchants accept cards for small payments and profit from those transactions. And, importantly, it also provides merchants with built-in loyalty programs – such as prepaid accounts that ‘live’ on a consumer’s existing credit or debit card – designed to encourage frequent and repeated card use by consumers for small payments.”

When asked about purchases for which they would be willing to use their cards, more than half of the respondents (representing a potential market of more than 100 million people) indicated they will use credit and debit cards at convenience stores when they can. The other top markets include fast-food (or quick-serve) restaurants/corporate cafeterias (47%), transportation (38%), coffee/beverages (35%) and parking (32%).

By examining consumer spending habits, the survey sheds light on the most common kinds of low-value cash transaction. When asked where they made six or more purchases over the previous 30 days, 43% of respondents replied that they purchased coffee or another beverage; 35% purchased items at a fast-food restaurant/corporate cafeteria (and approximately 5%. roughly 10 million Americans, purchased fast-food/corporate cafeteria items more than 20 times); and 18% made purchases from vending machines and/or kiosks. Men were almost twice as likely as women to make frequent vending purchases.

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