With 582 million banking and payment smart cards in circulation worldwide, it is a wonder that the technologically savvy U.S. lags far behind much of the developed world. Yet according to Smart Cards in the U.S.: Contactless Payment Cards, a new lackaged Facts report, only 27 million contactless payment cards were in circulation in the United States in 2006.

This scenario will quickly change, however, as the report estimates that total contactless credit and debit cards in U.S. circulation will reach 109 million by 2011. With the fast-paced American lifestyle continuing to put pressure on retailers to serve customers more efficiently, and card brands such as MasterCard and Visa pushing for bigger slices of the small-ticket payments pie traditionally reserved for cash, the time is finally right for large-scale penetration of smart cards in the payments market.

Total purchase volume in the U.S. via cards with a contactless feature neared an estimated $15 billion in 2006, registering a 700% CAGR from 2004 to 2006. That figure should increase significantly as the number of contactless transactions-nearly 777 million in 2006-are expected to reach 2.2 billion by 2011.

"Card issuers are rapidly expanding their market presence in contactless payments and the percentage of retailers having contactless payment systems is expected to nearly triple within two years," notes Tatjana Meerman, the Managing Editor of Packaged Facts. "Increasing consumer awareness of the technological, safety, and convenience factors inherent in smart cards will only serve to make penetrating the consumer market much easier in the coming years."