Contactless payment
Encyclopedia
Contactless payment systems are credit cards and debit cards, key fobs, smartcards or other devices which use RFID for making secure payments. The embedded chip and antenna enable consumers to wave their card or fob over a reader at the point of sale. Some suppliers claim that transactions can be almost twice as fast as a conventional cash, credit, or debit card purchase. Because no signature or PIN entry is typically required for purchases under US$25 in the US and under £15 in the UK, some research indicates that consumers are likely to spend more money due to the ease of small transactions. MasterCard
Canada says it has seen "about 25 percent" higher spending by users of its PayPass-brand RFID credit cards.
was one of the most notable early adopters of this technology, and offered their "Speedpass
" contactless payment system for participating Mobil
gas stations as early as 1997. Although Mobil has since merged with Exxon, the service is still offered at many of ExxonMobil
's stations.
The Co-operative Group
, Boots
, EAT.
, Pret a Manger
, Stagecoach Group
, Subway (restaurant)
and AMT Coffee
are among the retailers offering contactless payments to their customers in the UK. In July 2010 Little Chef
became the first restaurant chain to adopt contactless.
Major financial entities now offering contactless payment systems include MasterCard, Citibank
, JPMorgan Chase, American Express
, KeyBank, Barclays, Barclaycard
and HSBC
. Visa PayWave and Mastercard PayPass are examples of contactless credit cards which have become widespread in US and UK. The UK (and the rest of the world) version of the contactless applications differ from the US one. The UK version has the capability of transacting offline, based on the limit stored in the application.
The first contactless cards in the UK were issued by Barclaycard in 2008. there are approximately 9.6 million contactless-enabled cards, representing 7% of all cards, in circulation in the UK, with Barclaycard and Barclays leading the roll-out with eight million contactless-enabled cards in circulation and 25,000 terminals in use .
Telecom operators are starting to get involved in contactless payments via the use of near field communication
phones. Belgacom
's Pingping - Belgium, for example, has a stored value account and via a partnership with Alcatel-Lucent
's touchatag
provides contactless payment functionalities. In January 2010, Barclaycard partnered with mobile phone firm Orange, to launch a contactless credit card in the UK. Orange and Barclaycard also announced in 2009 that they will be launching a mobile phone with contactless technology.
network as normal credit and debit card transactions, there is a payment limit on single transactions and contactless cards can only be used a certain number of times before customers are asked for their PIN. Contactless debit and credit transactions are protected by the same fraud guarantee as standard transactions.
Under fraud guarantee standards US banks claim to be liable for any fraudulent transactions charged to the contactless cards. However, banks are not liable for the identity theft that the RFID card can encourage. Hence, this security issue remains the most important concern to the end user.
MasterCard
Mastercard Incorporated or MasterCard Worldwide is an American multinational financial services corporation with its headquarters in the MasterCard International Global Headquarters, Purchase, Harrison, New York, United States...
Canada says it has seen "about 25 percent" higher spending by users of its PayPass-brand RFID credit cards.
History
MobilMobil
Mobil, previously known as the Socony-Vacuum Oil Company, was a major American oil company which merged with Exxon in 1999 to form ExxonMobil. Today Mobil continues as a major brand name within the combined company, as well as still being a gas station sometimes paired with their own store or On...
was one of the most notable early adopters of this technology, and offered their "Speedpass
Speedpass
Speedpass is a keychain RFID device introduced in 1997 by Mobil Oil Corp. for electronic payment. It was originally developed by Verifone. As of 2004, more than seven million people possess Speedpass tags, which can be used at approximately 10,000 Exxon, Mobil and Esso gas stations worldwide...
" contactless payment system for participating Mobil
Mobil
Mobil, previously known as the Socony-Vacuum Oil Company, was a major American oil company which merged with Exxon in 1999 to form ExxonMobil. Today Mobil continues as a major brand name within the combined company, as well as still being a gas station sometimes paired with their own store or On...
gas stations as early as 1997. Although Mobil has since merged with Exxon, the service is still offered at many of ExxonMobil
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...
's stations.
The Co-operative Group
The Co-operative Group
The Co-operative Group Ltd. is a United Kingdom consumer cooperative with a diverse range of business interests. It is co-operatively run and owned by its members. It is the largest organisation of this type in the world, with over 5.5 million members, who all have a say in how the business is...
, Boots
Boots UK
Boots UK Limited , is a leading pharmacy chain in the United Kingdom, with outlets in most high streets throughout the country...
, EAT.
EAT.
EAT. is a chain of sandwich shops with over 90 branches in the UK, the majority in London, with others in Birmingham, Brighton, Cambridge, Canterbury, London Heathrow Airport , Gatwick Airport, Leicester, Manchester, Windsor, Oxford and Edinburgh.The first shop was opened in October 1996 in...
, Pret a Manger
Pret A Manger
Pret a Manger is a British sandwich retail chain based in the City of Westminster, London, United Kingdom. The name "Pret a Manger" comes from the French prêt à manger, meaning "ready to eat", a reference to prêt-à-porter .The company was founded in London in 1986 by friends Sinclair Beecham and...
, Stagecoach Group
Stagecoach Group
Stagecoach Group plc is an international transport group operating buses, trains, trams, express coaches and ferries. The group was founded in 1980 by the current chairman, Sir Brian Souter, his sister, Ann Gloag, and her former husband Robin...
, Subway (restaurant)
Subway (restaurant)
Subway is an American restaurant franchise that primarily sells submarine sandwiches and salads. It is owned and operated by Doctor's Associates, Inc. . Subway is one of the fastest growing franchises in the world with 35,519 restaurants in 98 countries and territories as of October 25th, 2011...
and AMT Coffee
AMT Coffee
AMT Coffee is a UK chain of coffeehouses that are mainly located in railway stations. It was founded in 1992 by Alistair McCallum Toppin and his two brothers Angus and Alan. Their first shop opened in Oxford City Centre. AMT was the first coffee company in the UK to use 100% fairtrade coffee and...
are among the retailers offering contactless payments to their customers in the UK. In July 2010 Little Chef
Little Chef
Little Chef is a chain of roadside restaurants in the United Kingdom, founded in 1958 and owned by the UK private equity group RCapital. Little Chef's previous owners were The People's Restaurant Group Ltd., a company belonging to British catering entrepreneurs Simon Heath and Lawrence Wosskow,...
became the first restaurant chain to adopt contactless.
Major financial entities now offering contactless payment systems include MasterCard, Citibank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
, JPMorgan Chase, American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
, KeyBank, Barclays, Barclaycard
Barclaycard
Barclaycard, part of Barclays Retail and Business Banking, is a global payment business. The Barclaycard was the first credit card introduced in the UK, coming into service in 1966. It enjoyed a monopoly until the introduction of the Access card in 1972....
and HSBC
HSBC
HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
. Visa PayWave and Mastercard PayPass are examples of contactless credit cards which have become widespread in US and UK. The UK (and the rest of the world) version of the contactless applications differ from the US one. The UK version has the capability of transacting offline, based on the limit stored in the application.
The first contactless cards in the UK were issued by Barclaycard in 2008. there are approximately 9.6 million contactless-enabled cards, representing 7% of all cards, in circulation in the UK, with Barclaycard and Barclays leading the roll-out with eight million contactless-enabled cards in circulation and 25,000 terminals in use .
Telecom operators are starting to get involved in contactless payments via the use of near field communication
Near Field Communication
Near field communication, or NFC, allows for simplified transactions, data exchange, and wireless connections between two devices in proximity to each other, usually by no more than a few centimeters. It is expected to become a widely used system for making payments by smartphone in the United States...
phones. Belgacom
Belgacom
The Belgacom Group is the largest telecommunications company in Belgium, headquartered in Brussels. Belgacom Group is primarily state owned, with the Belgian state holding 53.3% + 1 share...
's Pingping - Belgium, for example, has a stored value account and via a partnership with Alcatel-Lucent
Alcatel-Lucent
Alcatel-Lucent is a global telecommunications corporation, headquartered in the 7th arrondissement of Paris, France. It provides telecommunications solutions to service providers, enterprises, and governments around the world, enabling these customers to deliver voice, data, and video services...
's touchatag
Touchatag
Touchatag is an RFID service for consumers, application developers and operators/enterprises created by Alcatel-Lucent...
provides contactless payment functionalities. In January 2010, Barclaycard partnered with mobile phone firm Orange, to launch a contactless credit card in the UK. Orange and Barclaycard also announced in 2009 that they will be launching a mobile phone with contactless technology.
Security
As with all payment devices, contactless cards have a number of security features. Contactless runs over the same chip and PINChip and PIN
Chip and PIN is the brandname adopted by the banking industries in the United Kingdom and Ireland for the rollout of the EMV smartcard payment system for credit, debit and ATM cards.- History :...
network as normal credit and debit card transactions, there is a payment limit on single transactions and contactless cards can only be used a certain number of times before customers are asked for their PIN. Contactless debit and credit transactions are protected by the same fraud guarantee as standard transactions.
Under fraud guarantee standards US banks claim to be liable for any fraudulent transactions charged to the contactless cards. However, banks are not liable for the identity theft that the RFID card can encourage. Hence, this security issue remains the most important concern to the end user.
See also
- Mobile paymentMobile PaymentMobile financial services, also referred to as mobile money, mobile payment, mobile banking, mobile money transfer and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device....
- Dashtop mobileDashtop mobileDashtop mobile equipment refers to wireless mobile devices mounted on the vehicle dashboard. Dashtop mobile equipment includes satellite radios, GPS navigation, OnStar, mobile TV, HD radio, vehicle tracking system, MVEDR and Broadband Wireless Access devices. Currently, the dashtop mobile devices...
- Proximity cardProximity cardProximity card is a generic name for contactless integrated circuit devices used for security access or payment systems. The standard can refer to the older 125 kHz devices or the newer 13.56 MHz contactless RFID cards, most commonly known as contactless smartcards.Modern proximity cards...
- Near Field CommunicationNear Field CommunicationNear field communication, or NFC, allows for simplified transactions, data exchange, and wireless connections between two devices in proximity to each other, usually by no more than a few centimeters. It is expected to become a widely used system for making payments by smartphone in the United States...
- Vicinity cards
- Oyster cardOyster cardThe Oyster card is a form of electronic ticketing used on public transport services within the Greater London area of the United Kingdom. It is promoted by Transport for London and is valid on a number of different travel systems across London including London Underground, buses, the Docklands...
External links
- Near Future of Near Field by Joe Rayment, The Globe and Mail
- transferable RFID shield for purses, wallets, etc.
- RFID protected wallet / key holder
- ExxonMobil Speedpass locations
- Contactless.info is designed to provide information for UK retailers that have an interest in Contactless card acceptance
- Blog focused on contactless technologies
- Chase's "blink" uses RFID