Pay, But Don't Touch
Toll roads used them first. Buy a card, stick it in your car window and whizz right past the tollbooths. Traffic kept moving and having the right change didn't matter. Other uses for contactless cards have been suggested but have not yet become widespread. This may be about to change.
The Guardian reports that millions of people in Britain have been receiving debit and credit cards over the past few months with a "wave" symbol that will allow them "to pay for low-value items such as their morning coffee or lunchtime sandwiches by simply waving their plastic over a reader at the till."
So far, the cards have been used mainly in coffee shops in and around London but several large retail chains -- including Tesco, the Co-op, Boots, IKEA, Spar, National Trust gift shops and Little Chef restaurants -- are either running trials or, in some cases, rolling them out nationally. Others, such as Sainsburys and Waitrose, are still thinking it over. The paper also mentions "buses in Liverpool and black cabs in London, while several U.K. music festivals are expected to go cashless next summer," leading to the 2012 Olympics becoming "a contactless event" where visitors will be able to use their new plastic to pay for transport, tickets and refreshments.
Evan Schuman of storefrontbacktalk.com told RetailWire contactless payment trials in the U.S. have not been entirely successful.
Security is a big issue in both countries, although different approaches have been taken. In the U.K., retailers enter the amount due before the card is held in front of the reader for consumer approval. Distance is limited and controlled.
In early American experiments, customers displayed barcodes on their phones. According to storefontbacktalk.com, newer technology involves a middleman which "means retailers don't need new barcode-reading hardware ... customers never show retailers their account information, so it can't be stored -- or stolen." Instead, consumers use (surprise, surprise) an app, registering their bank account with its designer, Cimbal, who pays retailers when customers scan the retailer's barcode and key in a PIN. Did someone mention time-saving?
Discussion Questions: What are the pros and cons of contactless cards for retailers as well as consumers? What hurdles do you see toward further adoption?
[Author's commentary] Evan Schuman has reservations, which I share, about who will bear the cost of using contactless cards. Are the very few minutes possibly saved waiting in line to pay worth a possible increase in the price of what customers want to buy? Most of us know that fees incurred by retailers somehow manage to find their way onto product prices. Whether it's for card readers or middlemen, somewhere along the line, someone is making money by charging for their services.