The report–titled "Contactless Strategy & Forecast"–also said the promotion of non-network payment products will drive acceptance and pave the way for "radical changes in personal finance for every consumer, merchant and financial institution."

"Tap-and-go contactless payments will pave the way for cell phones and handheld computers to become 'electronic wallets,' packed with consumers' payment and merchant cards, coupon offers, even medical records, family pictures and more," Van Dyke said.

"But consumers won't benefit until the primary players–card networks, financial institutions, mobile carriers, merchants and handset manufacturers–work together toward a unified, simple solution that lets everyone win," he said.

The report said that insufficient incentive for merchants and wireless carriers to make the investment in the contactless tools is slowing progress toward such a future, but that momentum is occurring as "significant subsidies from card networks spur progress with fast-food restaurants, stadium concessionaires, convenience stores and gas stations."

But that won't be enough to make the technology leap to the next level.

"To drive the next phase of contactless payments, card networks must help merchants create competitive, desirable products: closed loop gift cards and private label cards," say Bruce Cundiff, director of payments research and consulting at Javelin (www.javelinstrategy.com).

"This will create a robust contactless infrastructure, hinder the development of products and networks from threatening powerhouses such as PayPal and Google, and spur wireless carriers to push the spread of NFC [near-field communications] technology," Cundiff said.

–[email protected]