Credit card purchases in a blink
By Kristin Arnold • Bankrate.com

An innovative credit card might make doing business a little quicker for consumers, and more profitable for credit card issuers, with a scanning system that allows cardholders to spend less time in line at fast food drive-thrus, convenience stores and pharmacies.

However, some consumer advocates warn that the new approach also might tempt customers to spend more and also might present identity-theft problems.

On June 1, Chase Bank began rolling 1 million of its contactless "blink" cards to their customers in and around Atlanta, Ga. Other cities will follow in weeks to come.

MasterCard has also issued its "PayPass" card, which could soon enable customers to make purchases through cell phones and key chains. American Express will offer its contactless version, called "Express Pay," later this year.

The contactless technology, called RFID, or radio frequency identification, is fairly new to credit cards, but it is the same technology you see on toll roads: People use electronic passes so they don't have to wait in line to pay. The blink card provides essentially the same data that are stored on a card's magnetic strip, but because there is no swipe involved and no signature required, consumers have faster transactions, and merchants can process more customers.

According to Tom O'Donnell, senior vice president of marketing at Chase, the benefit to the consumer will be increased ease of use. "You need only to wave the card or tap the card on the reader," O'Donnell says. In some cases, you might just need to wave a purse or wallet carrying the card within a few centimeters of the reader.

Increased dangers of ID theft?
The easy-to-use, faster blink card is raising questions about security, since no signature is required and face-to-face transactions between merchants and customers will be minimal.

However, Chase says the blink card offers the same security and privacy protections as any other Chase card with zero liability. According to O'Donnell, "Chase has done the research and figured out 80 percent of possible security breaches and has gone above and beyond to protect our customers, because in the end we pay for any illegal transactions."

Steve Bucci, president of Money Management International Financial Education Foundation, says the technology might even be safer than conventional credit cards because "one less person is looking at your card and the number. Usually merchants get printed receipts where they see your entire credit card number, but with the blink card, merchants will only see the last four digits on the card."

More convenience, more money
However, Bucci says, the "credit card companies have speeded things up another notch. They speed up the process of spending more money. In turn, more people will crash."