reDesign

March 3, 2007

Touch-and-go credit card payments

Filed under: personal finance — Rakesh Agrawal @ 12:02 pm

The AOL cafeterias recently added the PayPass credit card readers. Instead of handing your card to the cashier or sliding the magnetic stripe through a reader, the terminals allow you to just touch your credit card against the reader.

The system uses a technology called RFID. If you work at a company where you enter by hitting your badge against a wall reader or you use Metro’s SmarTrip or London’s Oyster systems for paying your subway fare, you’re already using RFID.

Adoption of RFID for credit cards has been slow. Nationally, CVS, McDonald’s and 7-11 have rolled out the system. I’ve also seen it at Whole Foods and a few movie theaters. Trying to find a reader is complicated by the fact that different companies refer to it by different names: PayPass, ExpressPay, Contactless and blink. It’s commendable that they are trying to come up with friendlier names than the computer industry (802.11g, IEEE 1394, etc.). But a consistent name would help in building consumer awareness.

Getting an RFID credit card isn’t automatic, either. Most credit cards don’t have the chips in them. With the expansion to the AOL cafeterias, I decided to make the effort to getting an RFID-enabled card. Neither American Express or Citi could issue my card with the chip. (They have others, but I didn’t want a new account.) Chase did.

Blink logoLike those overly techno-looking fonts that companies use to imply that something is futuristic, Chase has a drawing of what people think of as a microchip on the front of the card. The actual chip is elsewhere on the card and not at all sexy.

The difference in the time it takes to tap a card versus sliding it through a reader is a fraction of a second. The bigger time savings comes from the fact that for most transactions under $25 you don’t have to sign. But this isn’t unique to RFID; many retailers are already doing that with magnetic-stripe based transactions.

I was hoping to save the time it takes to get the card out of my wallet, but (unlike my SmarTrip), I couldn’t get it to work through my wallet. The chip is small enough – about 3/16″ square – that it could easily be placed on a key tag. That would make it much more convenient.

But it’s still not as convenient as the process at Google’s cafeterias.

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8 Comments »

  1. for what it’s worth, the latest american express blue cards have RFID.

    Comment by mukesh — March 5, 2007 @ 12:19 am

  2. I will say that the different names by different credit card companies can be confusing for the consumer. Though Mastercard’s product – PayPass seems to have the most positive brand image and is most recognizable and accepted.

    Citi will issue you a payment tag to attach to your key chain or loosely slip in your pocket. I believe this is available on all their US issued credit consumer products (MasterCard branded only). Though, it might also be offered on Canada and/or business credit card products. I also think their debit products have this option available. I think that this (payment tag) is much smarter than a chip in the card. As this would mean still having to pull out your wallet and your card from your wallet to wave your card with chip, but with a tag on your keychain just means you pull out your keys, which often inevitably have a loyalty card attached that you need to scan anyways. Just call Citibank and they will send you a new card and payment tag that when you activate the new card it will auto activate the payment tag. No new application needed if a US based consumer card I believe.

    American Express only offer a few of their credit based products in the US with ExpressPay. Holders of these products could get a keychain tag, or if they are up for card renewal or loose their card or otherwise need their card replaced will only get an embedded chip card on these select products.

    The next this would be a mobile phone with this chip. Citi and MasterCard are in trial with this in New York called the NYC Mobile Trial. The link is: http://www.mastercard.com/us/paypass/mobile/index.html

    Out of curiosity, which Whole Foods locations have you seen PayPass or contactless readers? I don’t think they have distributed it chain-wide yet, right? Maybe they are just testing it?

    Comment by A. S. — March 5, 2007 @ 11:04 am

  3. I’ve seen the reader at the Whole Foods in Arlington, Va.

    As far as Citi goes, they won’t send me anything. When I try to get it, I get this message:

    “The payment tag is not available for your card type, state, or both at this time.

    Although the payment tag isn’t available today, it may be soon. If you have questions, please call the number on the back of your card.”

    If the illustration they have is to scale, that’s an unnecessarily big (and inconvenient) tag. I wouldn’t want to have to carry around something that large.

    Thanks for the pointer on the mobile trial. I’ll take a look.

    Realistically, couldn’t the chip just be a sticker you put on anything? You could have an RFID Band Aid.

    There doesn’t seem to be a technical reason to get the handset manufacturer/wireless carrier involved. (I know there are business reasons.)

    Comment by Rocky Agrawal — March 5, 2007 @ 11:15 am

  4. Actually I found a list of CitiCards that are available with Payment Tags. I would presume this is for holders in any region of the US, as there does not appear to be regional restrictions. I guess they issue a Visa payment tag of sorts on a Citibank Visa. I had thought the Payment tag was exclusive to MasterCard and PayPass.

    http://www.citicards.com/cards/wv/copy.do?screenID=1275

    Citi® Payment Tag is available on:

    Citi® Diamond Preferred® Rewards Card
    Citi® Dividend Platinum Select® MasterCard®
    Citi® Diamond Preferred® Card
    Citi® Platinum Select®
    AAdvantage® World MasterCard®
    Citi PremierPass® Card
    Citi® Bronze / AAdvantage® MasterCard®
    Citi PremierPass® Card – Elite Level
    Citi® Platinum Select® MasterCard®
    Citi® Gold / AAdvantage® World MasterCard®
    Citi® Driver’s Edge® Platinum Select® MasterCard
    Citi® Home Rebate Platinum Select® MasterCard®
    Citi ProfessionalSM Card with ThankYou Network®
    Citi ProfessionalSM Card
    Citi® Platinum Select® Visa® Card for College Students
    Citi® Platinum Select® MasterCard® for College Students
    Citi® Dividend Platinum Select® Visa® Card for College Students
    Citi® Dividend Platinum Select® MasterCard® for College Students
    Citi® Bronze / AAdvantage® MasterCard® for College Students
    Citi® Driver’s Edge® Visa® Card for College Students
    Citi® Driver’s Edge® MasterCard® for College Students

    The tag is thick and a very hard plastic. The length is about the size of a key. The weight is less than a metal key. I think they make it such that it is indestructible and can get banged round with your keys and loyalty cards, and key chain in the car or a bag. It is a nice size to put you thumb on one end and has enough room to tap the reader at the other and see it tap without fumbling around.

    It could be a sticker on anything as you say, but I think that bring in security issue of if the sticker peeled off and someone else put it on something and used it for themselves. Having the tag/chip embedded in a card, phone or key chain tag allows some control over the distribution to the point of ensuring a somewhat reasonable level of security.

    Comment by A. S. — March 5, 2007 @ 1:34 pm

  5. I took a closer look at the mobile trial and it seems to be needlessly complicated.

    You have to have a special handset with a special application. When you want to make a payment, you have to launch the application (if you haven’t gone in and set it to stay active).

    Unless the application is also doing things like tracking your spending for you, I’m not sure I see the consumer value.

    What’s described on the Web site could be accomplished by placing a sticker on the phone. That will work on any handset, on any carrier.

    You could use that super sticky adhesive they use on anti-theft tags that destroys the tag if you try to peel it off.

    Comment by Rocky Agrawal — March 5, 2007 @ 5:53 pm

  6. That is why it is a trial. They are using a prototype Nokia phone with the NFC feature. You download your card details to the phone at time of set-up and you are set to go. Th epoint is to see if it is useful to users such that Nokia wants to include this technology in future handsets, and can convince carrier to carry that/those handset(s) in their device portfolio.

    You have the option of always active, active but ask for passcode, or off. This is for security reasons and “tesing” user preferences. It is only complicated if the user does not choose to keep it on always active simply becuase more work is needed to transmit card data.

    The consumer value is convenience. Nearly everyone with a credit card also have a mobile phone and carry it with them everywhere already, so why not tap into Cingular’s customer base and use that as a platform and provide convergence of functions — phone, email, camera, internet, and payment in one device—converged convenience.

    Comment by A. S. — March 6, 2007 @ 9:41 am

  7. Thank you very much for an interesting blog and comments.

    Is the “Smartrip farecard and credit card in-one” based on ISO14443 or is it a proprietory solution. Is the credit card function on the chip or still on a magnetic stripe?

    Thank you very much in advance for any feedback!

    Comment by Hege Ask — October 24, 2007 @ 5:17 am

  8. What does the Google Wallet announcement mean for ISIS?…

    It’s hard to say definitively without seeing the actual execution, but here’s how I would handicap it: * Distribution. With 3 of the 4 major U.S. carriers partnering with ISIS (Sprint partnered with Google), ISIS has potential distribution to 235 mil…

    Trackback by Quora — May 28, 2011 @ 3:47 pm


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