November 18, 2005
RFID for contactless credit cards
Credit card companies have started issuing contactless credit cards that are embedded with RFID chips. A contactless credit card enables transactions without the customer having to swipe the card and sign afterwards. This could lead to other developments in the POS market.
The credit card is to be waved in front of a scanning device that connects it to the credit account. Chase Bank U.S.A has introduced RFID-enabled Visas and MasterCards that it calls “blink”. The cards can be used at 7-Eleven outlets, AMC Theaters, CVS, and Duane Reade in the New York tristate area. Users benefit as transaction times are shortened and they can gain from loyalty programs linked to the use of RFID cards. Increased customer loyalty and improved cash management are the benefits to the merchants. The resellers will come into the picture once the technology is ready for mass adoption. The development of a channel market will lead to business in card readers, middleware, etc. The use of contactless credit cards is expected to increase in 2006.
Industry watchers feel that the next couple of years will see the setting up of the infrastructure for the time when devices such as mobile phones with near-field communications will be common. Speedpass in the US and contactless transit cards in Hong Kong are examples of customer acceptance of the technology.
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