Contactless payment

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Contactless payment systems are credit cards, key fobs, smartcards or other devices which use RFID for making secure payments. The embedded chip and antenna enable consumers to wave their card or fob over a reader at the point of sale. Some suppliers claim that transactions can be almost twice as fast as a conventional cash, credit, or debit card purchase. Because no signature is typically required for purchases under US$25, some research indicates that consumers are likely to spend more money due to the ease of small transactions.

Industry analysts predict that there will be almost 40 million contactless payment devices in use in the US by the end of 2006. The growth of the technology, however, has been seriously hampered by concerns of identity theft and other possibilities of fraudulent manipulation of the technology. A University of Massachusetts study conducted in 2006 revealed some of the possible security risks in using the technology, and the conductors of the study were able to hack into one of the devices using a wireless frequency. That being said, corporations offering the technology have worked hard to steadfastly deny the security risks in using the technology. Due to this risk, RFID protection is available in wallets and other key holders designed for this purpose.

Mobil was one of the most notable early adopters of this technology, and offered their "Speedpass" contactless payment system for participating Mobil gas stations as early as 1997. Although Mobil has since merged with Exxon, the service is still offered at many of ExxonMobil's stations. Major financial entities now offering contactless payment systems include MasterCard, Citibank, JPMorgan Chase, American Express, KeyBank and HSBC.