Contactless payment field create a new payment options for merchants. Contactless payments are quick, simple and pave the way for higher profits. An intelligent computer chip with data and an antenna is embedded in a credit card, debit card or FOB.
“Retailers do not have to worry about compatibility with their existing systems or security,” said Mohammad Khan, ViVOtech President and Founder, Santa Clara, California-based developer of software without contact, transaction management systems and readers.
“We have been working closely with processors, card issuers and terminal suppliers to create an open system with 14 443 standard IS0. Uses secure encryption technology. The smart card does not leave the hands of customers so it is more insure and no skimming of data, “said Kahn, who sees no contact as a great opportunity for traders to increase their income. It provides the contactless payment in lieu of cash because they are faster, more comfortable and cost less due to less shrinkage and less labor required.
There are two types of contactless readers available: Peripheral Contactless Readers (PCR) that plug into existing point of sale terminals, and Integrated Contactless Readers (ICR) to replace traditional readers and offer both magnetic stripe and contactless reading skills. Traders can buy either type of reader. The PCR usually cost about $ 150. Some commercial providers, such as ACIES, however, are offering competing plans and offer readers free terminals.
David Robertson, publisher of The Nilson Report (Carpinteria, Calif.) estimates that 12 million contactless cards currently in circulation in the U.S. He predicts that the first successes without contact will be in stores in the mark and then the merchants in areas where the cards are developing it himself when his customers ask to use their contactless cards.
Clients are asking for no contact in the New York metropolitan area where many cards have “fallen,” says CEO and President Oleg Frier acies, Inc., National New York-based payment processing in the city and provider financial services. Other areas where there are major contactless readers and cards include Atlanta, Philadelphia, Denver, Dallas and Orlando, said Khan.
Studies show the speed and the added value of contactless payments, because usually when someone does not pay in cash the amount of the transaction increases. Visa trials showed its contactless card transactions are 25% faster than cash. MasterCard PayPass trials showed an increase in transaction amounts and 12-18 seconds in the shorter terms of payment for transactions drive-thru. Aite Group reported that CVS, the pharmacy chain, has found the contactless transaction has on average 12.5 seconds, compared to 26.7 seconds for payments with magnetic stripe card and 33.7 seconds for a cash transaction.
Traders who have a minor part of customers to services such as fast food restaurants, cafes, cinemas, pharmacies, convenience stores and drive-thrus can benefit enormously from the contactless payment. McDonald’s, AMC Theatres, CVS, Meijer, Duane Reade, Regal Entertainment, Ritz Camera, Arby’s, Cold Stone Creamery, Eckerd, Carl’s Jr., Good Times Burger, KFC, Racetrack, Subway, Sonic (Drive-In restaurants) and Walgreens have installed contactless readers. Convenience stores are preparing to accept contactless payments. Contactless readers are being installed in 5300 7-Eleven and Sheetz 350 stores. WaWa markets are installing more than 2,000 readers in its 540 stores branded credit card and loyalty programs.
Card associations also enthusiastic about contactless payments
“It takes a village to launch a new technology, Visa, we have an absolute commitment to ensure the success of contactless payments,” said Elvira Swanson, a spokesman for Visa. Visa, with four million Visa contactless cards in circulation, provides collateral materials, online demos, and commercial support teams to help educate merchants.
“This is the real thing. Contact is beyond the” chicken and egg “concept stage now when you look at the way many financial institutions have taken the decision to offer non-contact and the number of merchants accept domestic” said TJ Sharkey, Vice President of Business Development, USA Acceptance of MasterCard International. MasterCard is supporting non-contact in many ways. The merchants that accept contactless payments are listed on the MasterCard Web site, where there are demonstrations on how you’re Touch N Go, PayPass work cards. Television commercials illustrating their PayPass cards are distributed nationally.
The banks issuing contactless cards include Citibank, MBNA, HSBC (debit cards), JP Morgan Chase, Key Bank (debit cards) and the Citizen.
There has been several pilot programs contact in sports stadiums, including San Francisco, Seattle, Baltimore and Philadelphia. Recently, another form of contact factor was added to the mix, with the trial of NFC (Near Field Communications) contactless payments for mobile phones at Philips Arena in Atlanta. Holders of season tickets to the accounts of credit issued by Chase Visa and Cingular Wireless accounts can make contactless payments by simply holding their Nokia mobile phones equipped with Philips’ semiconductor chips and ViVOtech software near a NFC 150 terminal. NFC is compatible with ISO 1443 reader has other features like the ability to send a coupon for a reader.
