When paying with plastic, why swipe? Just wave

Tired of having to swipe and sign every time you use a credit card?

Visa is hoping to simplify the process of paying with plastic with a new payment technology it introduced Thursday. With the company's new "contactless" system, consumers need only wave credit and debit cards within a few inches of a reader to complete a purchase. And for purchases of less than $25, no signature is required.

The technology will be more convenient for merchants and consumers alike by reducing checkout times and lines, Visa executives said. It's also designed to be an easy alternative to cash for small purchases such as a soda or pack of gum.

"Our hope is that the contactless payment feature will drive added convenience and speed to consumers," said Niki Manby, vice president of market and technology innovation at Visa USA. "You no longer need to swipe or hand over your card."

But don't go waving your credit and debit cards around just yet. Visa must first convince merchants and card issuers to use new equipment. For merchants, that means purchasing new card readers. For banks, it means introducing special cards capable of transmitting account data via radio signal rather than magnetic stripe. So far, no card issuers are offering them, Manby said.

With 5.6 million merchants in the United States, Visa will need some time to phase out its old system.

"It's not something retailers will do lightly overnight," said Pennie Gillespie, a Forrester Research analyst.

Visa is not alone in the endeavor. MasterCard and American Express also are experimenting with contactless cards. MasterCard has been doing field tests in Florida, while American Express is doing trials in Arizona and New York. The companies are using compatible technology, so merchants can use the same card readers for all three systems. Merchants just need to install an extra bit of software to make it all work together, said Patrick Gauthier, senior vice president of new product development at Visa.

Visa and its rivals have some obstacles to overcome before the technology becomes more mainstream, Gillespie said. Not only must they convince merchants to buy new readers, they must assure consumers that the new-fangled cards are every bit as secure as the old ones in an age of identity theft and high-tech hacking.

"Security is a question," Gillespie said. "How easy is it for someone to interact with a wireless communication and pick up a number?"

Visa designed its system to be highly secure, with multiple layers of encryption and fraud detection, Gauthier said. Each transmission between card and reader has a unique code that cannot be reused even if it is intercepted, a key security feature, he said. In addition, consumers have no liability for fraudulent charges with the new cards as with the old ones, Gauthier added.

"Security is at the core of our business," Gauthier said. "We are fully confident that the platform we have developed is as secure as any form of Visa cards today."

[Dachi]

Where have I heard that before?

"We are fully confident that the platform we have developed is as secure as any form of Visa cards today."

The problem with stealing someone?s credit card is you have to physically remove it from someones presence. With a wireless system you could copy the cards "footprint" or charge it directly. The don't believe bypassing their "security measures" are trivial but others may not agree.

It is not like it would make them the first people to make that statement and be wrong.

[quasarstrider]

VISA is going bonkers

I really, really fear sending sensitive data over wireless. Especially my credit card details! Worse, they are saying it isn't password protected or anything! Are these people totally insane?

[Christopher Hall]

I don't fully understand this

Is it like the ExxonMobil Speedpass? I don't really get how this technology works.

[Jim Hubbard]

This sounds safe.......

No way to abuse this system.... "consumers need only wave credit and debit cards within a few inches of a reader to complete a purchase. And for purchases of less than $25, no signature is required."

How soon will theives place electronic card readers (add a little more power to reach out a little farther) and start hitting every passer-by on a street or in the mall?

[bobby_brady]

This is stupid

So the guy standing next to you might get charged for your grocerys if he stands too close to the reader? It's barely any more effort to swipe a card than wave it. This is a really stupid idea from Visa.

It sounds scary to me

Well, currently the credit card scammers have to phsycally obtain the cards in order to get the cards' information (not talking about Internet hacking here). If, one day, we need just wave the card in front of the scanner when we use the card to pay. Does it also means that if someone wants to collect credit information, he/she just need to carry a scanner to go pass people who have their credit cards in their wallets and in the packets? How many people carry more than just one card? How convenient it will make for those credit card scammers. One scan, all cards.

NO THANKS!

No way on Earth do I want anything to do with RFID technology in my credit cards! The next thing you know, thieves will be waving card scanners by your backside as you walk past them on the street trying to get your card data. This RFID stuff in ID's and cards is bad news - the next thing you know, I'll be buying a multi-layer tinfoil wallet that puts out a false signal just to keep from getting identity chumped!

[Michael Grogan]

That's easy...

With this thing thieves won't even have to gather credit card data. They'll just walk by you on the street and automatically debit your card for 25$ with a portable reader!