August 27, 2005

Contactless Card and Blink: Part II

Chase introduced the card in June in an effort to be the first to pave the way for a national switch to smart cards in the U.S. To date, Chase has issued two million blink cards to Visa and MasterCard credit cardholders in Colorado and Georgia and its continually adding new merchant locations to the 400-plus initially slated for the rollout.

Making a decision to become the 'first to leap'

According to ODonnell, Chases smart card initiative was a natural extension of its credit card business, which currently has more than 94 million cards in circulation. So when Visa announced in May that it had agreed to adopt MasterCards PayPass ISO 14443-certified technology in an effort to share a common communications protocol for RF-based payment at the point of sale, Chase moved forward. The ISO 14443 standard allows retailers to use a single terminal to accept smart cards from Visa, MasterCard and American Express (American Express launched its ExpressPay contactless key fob program in 2004 and has recently announced that its Blue cards would now incorporate the ExpressPay technology).

Industry observers see Visas and MasterCards move to cast aside their long-time association rivalry as determination to become dominant players in the next generation of payment technology in the U.S. Unlike elsewhere around the world, the banking industry here has made slow progress in migrating from magnetic-stripe to chip cards. There are a number of issuers interested in this (contactless cards), but Chase has the most experience, says Allen.

The launch of blink follows on the heels of a PayPass market trial in Orlando in 2003 involving Chase, Citibank and MBNA as well as 16,000 cardholders and 60 retail locations. That test, coupled with MasterCards ongoing PayPass alliance with McDonald Corp., demonstrates that the convenience and security of contactless end-to-end transactions appeal to U.S. consumers. To date, 7,500 McDonalds restaurants accept PayPass cards and the fast food chain announced plans to expand acceptance to some 13,600 U.S. restaurants by year end.

Read full article at Contactless News

Posted by keefner at August 27, 2005 03:09 PM