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
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.
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.
new credit card technology will help you spend your money faster. Unfortunately,
it won't do a thing to help you spend your money more wisely. That's where you,
our readers, come in. |
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.
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."
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."