Credit Card Use Faster, Easier: No Signatures for Some Transactions; Swiping Pass for Others

RISMEDIA, Jan. 23, 2007-(MCT)-If cash is king, then credit cards are the emperor. Plastic's worldwide reign makes it a favorite among people who count on fast, easy transactions.

And it's becoming even faster and easier to use credit cards, especially in places where merchants don't require signatures for small purchases.

Additionally, credit card companies such as Visa and MasterCard have been introducing cards that don't even require swiping.

For at least a couple of years, QuikTrip Corp. has not required credit card signatures on purchases that cost less than $25, said Mike Thornbrugh, manager of public and government affairs at the Tulsa-based convenience store chain.

"We embrace it," Thornbrugh said. "Anything that helps us to speed up the transaction for our customers, we love it."

Walgreen Co., likewise, has a signature-free policy at its drugstores.

"Basically, credit card companies don't require us to ask for signatures on purchases under $25 when the card is swiped at the register," said Carol Hively, a spokeswoman for the Deerfield, Ill.-based chain.

"Credit cards are intended as a fast form of payment, and the credit card companies want to encourage their frequent use," Hively stated in an e-mail. "Walgreen's also emphasizes fast service, so we like being able to speed up the transaction."

Transactions are becoming even speedier, however, with the introduction of cards that come with embedded chips that don't require a signature or swiping. Both Visa and MasterCard have released their own versions of this product.

With the Visa Contactless card, for example, customers simply hold their card up to a "secure reader" for a second or two. The card never leaves the consumer's hands. It can be used for transactions under $25, and customers don't need to sign a receipt.

The technology uses radio frequency technology to send the card information to the reader. Visa's cards also have the traditional magnetic strip on the back and can be used as a regular card as well.

Visa launched its contactless card in June 2005. Before making the card available to U.S. customers, the company ran pilot tests of the technology as far back as 2002, said Visa USA's Elvira Swanson, director in corporate relations, during a phone interview.

Visa Contactless is still in a relatively early stage, Swanson said, though about 10 million of the cards are in use. For now, the cards and terminals are concentrated in larger metro areas such as Denver, Atlanta and New York.

A little more than 30,000 merchants' locations nationwide are accepting the contactless cards, Visa says.

A McDonald's restaurant aims to have the contactless technology installed within the year, said Bob Wagner III, owner-operator.

"Our hope is to increase the speed of service the customer can get and require less steps to move customers through faster," he said.

Speed is the biggest bonus of the technology. Using a contactless card shaves 25% off the transaction time, said Visa USA's Swanson. And that can make a world of difference to a fast-food merchant who serves meals to a lunchtime crowd.

For all merchants where speed is of the essence and purchases are often under $25-dry cleaners, theaters, convenience stores, gasoline stations and fast-food restaurants-the technology should continue to make strides, Swanson said.

"It's really a sign of the continued migration from cash and check to electronic forms of payment," she said.

MasterCard, likewise, first launched PayPass in 2002 and began rolling out its contactless payment program in 2004.

"Consumers were really looking for a convenient, fast way to make purchases. They were also looking for an alternative to cash," said Cathleen Conforti, senior vice president and Global PayPass product manager for MasterCard Worldwide, in a phone interview.

MasterCard found that consumers were using the PayPass cards 18% more on average than their previous cards, Conforti said.

The MasterCard PayPass has a built-in chip and antenna technology as well as a standard magnetic strip. The card and specially equipped PayPass terminals communicate details using short-range radio waves, according to the company.

"It's a very secure product — consumers like that," Conforti said. "They also like that the card doesn't leave their hand. They don't have to hand over their card."

The PayPass technology isn't just a credit card feature. It also can appear on debit cards and pre-paid cards, among other forms of non-cash transactions, Conforti said.

Today, the PayPass technology is offered in 13 countries. Last year, MasterCard had 11 million of them in circulation and devices in place at more than 36,000 merchant locations, Conforti said. It also is accepted in the traditional way at more than 23 million MasterCard locations worldwide.

The technology is opening all kinds of channels, she said, noting that some vending machines have been developed to accept the contactless cards.

It also has proved popular in sports facilities, and is now accepted in many Major League Baseball and National Football League stadiums as well as at many golf events. In addition, it is being tested on a subway line in New York City.

MasterCard, in conjunction with a financial services company, also is testing the technology on cell phones.

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