Contactless Payments: Delivering Merchant
`and Consumer Benefits
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`A Smart Card Alliance Report
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`Publication Date: April 2004
`Publication Number: PT-04002
`
`Smart Card Alliance
`191 Clarksville Rd.
`Princeton Junction, NJ 08550
`www.smartcardalliance.org
`Telephone: 1-800-556-6828
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`About the Smart Card Alliance
`The Smart Card Alliance is the leading not-for-profit, multi-industry
`association of member firms working to accelerate the widespread
`acceptance of multiple applications for smart card technology. The Alliance
`membership includes leading companies in banking, financial services,
`computer, telecommunications, technology, health care, retail and
`entertainment industries, as well as a number of government agencies.
`Through specific projects such as education programs, market research,
`advocacy, industry relations and open forums, the Alliance keeps its
`members connected to industry leaders and innovative thought. The Alliance
`is the single industry voice for smart cards, leading industry discussion on the
`impact and value of smart cards in the U.S. For more information, visit
`www.smartcardalliance.org.
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`Copyright © 2004 Smart Card Alliance, Inc. All rights reserved. Reproduction or
`distribution of this publication in any form is forbidden without prior permission from
`the Smart Card Alliance. The Smart Card Alliance has used best efforts to ensure,
`but cannot guarantee, that the information described in this report is accurate as of
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`accuracy, completeness or adequacy of information in this report.
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`Government Agencies: Government employees may request free copies of this
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`Table of Contents
`EXECUTIVE SUMMARY................................................................................ 4
`CONTACTLESS PAYMENT: OVERVIEW.................................................... 6
`EXXONMOBIL SPEEDPASS.............................................................................. 7
`MASTERCARD PAYPASS ................................................................................ 7
`EXPRESSPAY FROM AMERICAN EXPRESS........................................................ 9
`VISA............................................................................................................ 11
`SUMMARY OF CONTACTLESS PAYMENT INITIATIVES ....................................... 12
`CONTACTLESS PAYMENT: CONSUMER BENEFITS .............................. 13
`SPEED......................................................................................................... 13
`CONVENIENCE ............................................................................................. 13
`EASE OF USE............................................................................................... 14
`CONSUMER EXPERIENCE.............................................................................. 14
`SECURITY AND PRIVACY............................................................................... 15
`CONSUMER LOYALTY ................................................................................... 15
`CONSUMER BENEFITS SUMMARY .................................................................. 16
`CONTACTLESS PAYMENTS: MERCHANT BENEFITS ............................ 17
`INCREASED THROUGHPUT ............................................................................ 17
`INCREASED REVENUE................................................................................... 17
`IMPROVED OPERATIONAL EFFICIENCY AND CUSTOMER SATISFACTION............ 18
`BETTER CUSTOMER INFORMATION................................................................ 18
`PAYMENT DEVICE BRANDING OR CO-BRANDING ............................................ 18
`COMPETITIVE DIFFERENTIATION.................................................................... 18
`DRIVING THE VALUE CHAIN........................................................................... 19
`FINANCIAL PAYMENTS INDUSTRY BACKING .................................................... 19
`MERCHANT BENEFITS SUMMARY .................................................................. 19
`SAMPLE BUSINESS CASE.............................................................................. 19
`IMPLEMENTATION IMPACT AND BEST PRACTICES FOR MERCHANTS
`...................................................................................................................... 22
`LEVERAGE OF EXISTING PAYMENTS INFRASTRUCTURE................................... 22
`CHANGES TO THE POS SYSTEM ................................................................... 22
`POS SOLUTION OPTIONS............................................................................. 23
`MERCHANT INVESTMENT .............................................................................. 24
`INTEROPERABILITY ....................................................................................... 24
`POS, STORE CONTROLLER, AND ACQUIRER SOFTWARE................................ 25
`SHORT-TERM AND LONG-TERM ROLLOUT STRATEGY .................................... 25
`WHAT(cid:182)S NEXT?............................................................................................ 26
`KEY CONSUMER AND MERCHANT ISSUES............................................ 27
`CONSUMER ISSUES...................................................................................... 27
`MERCHANT ISSUES ...................................................................................... 27
`CONCLUSION.............................................................................................. 30
`REFERENCES AND RESOURCES............................................................. 31
`PUBLICATION ACKNOWLEDGEMENTS................................................... 33
`APPENDIX A: TRANSIT CONTACTLESS PAYMENT .............................. 34
`APPENDIX B: CONTACTLESS PAYMENT TECHNOLOGIES................. 37
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`Executive Summary
`Consumers Benefit from Contactless Payment
`Millions of U.S. consumers are already paying for purchases using
`contactless payment, with millions more expected this year as new financial
`industry-backed contactless payment initiatives are launched nationwide.
`Consumers love the convenience and speed of paying with a contactless
`card or fob(cid:178)no more fumbling for cash, counting change, or worrying about
`whether they have enough cash for a purchase. In many cases, consumers
`also don(cid:182)t need to sign a payment card receipt or enter a personal
`identification number (PIN). While paying with a payment card but through a
`contactless interface may appear to be a minor difference, the impact on
`today(cid:182)s busy consumer is significant.
`Both MasterCard International and American Express have been conducting
`contactless payment pilots in the United States and have reported strong
`consumer approval. These pilots use radio frequency (RF) communication
`between a contactless device and a point-of-sale (POS) terminal to transmit
`consumer payment information. The speed, convenience, and control of
`contactless payment transactions result in consumers favoring the
`contactless payment device and the merchants accepting contactless
`transactions.
`Other contactless payment initiatives (for example, U.S. transit systems and
`ExxonMobil Speedpass) have reported similar positive consumer reactions.
`Merchants Benefit from Contactless Payment
`Contactless payment is particularly attractive in merchant segments where
`speed and convenience of payment are essential (for example, quick-service
`restaurants, gas stations, convenience stores, parking facilities, transit
`services, entertainment venues, and unstaffed vending locations).
`Merchants may realize a number of benefits from contactless payment:
` Fast transaction times move customers more quickly through the
`payment process.
`Increased customer spending, increased frequency of purchases, and
`increased customer loyalty increase revenues.
` Reduced cash handling, improved payment terminal reliability, and
`streamlined payment processes improve operational efficiency and
`reduce operating costs.
`The new contactless payment initiatives in the United States also offer
`merchants opportunities to increase differentiation and customer satisfaction
`in highly competitive retail markets.
`Contactless Payment Delivers a Positive Business Case
`Merchants can implement a contactless payment solution quickly and easily
`and start accepting the contactless payment cards and fobs that are now
`being issued. American Express, MasterCard, and Visa have standardized
`on a single contactless payment standard in the United States, ISO/IEC
`14443, and are implementing or recommending a contactless payment
`approach that leverages the existing payments infrastructure. What this
`means is that merchants can easily add a contactless RF payment terminal
`to their existing POS systems and start accepting contactless payment. The
`business case for certain merchant segments shows significant increases in
`revenue with a modest investment.
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`Merchants who can benefit from faster transaction speeds and increased
`consumer convenience should assess the business case for upgrading POS
`systems to support contactless payment, along with traditional magnetic
`stripe payment. The combination of positive consumer experience,
`standards-based technology, use of the existing payments infrastructure, and
`support from major financial industry players offers compelling business
`drivers for contactless payment. In 2004, merchants can take advantage of
`the nationwide rollout of financial payments industry-backed contactless
`payment solutions to create a strategic competitive advantage and increase
`sales.
`About This Report
`This report was developed by the Smart Card Alliance to discuss merchant
`benefits and the business case for implementing contactless payment in the
`United States. This report provides answers to commonly asked questions
`about contactless payment, such as:
` What merchant segments can benefit most from contactless
`payment?
` What financial organizations in the United States are supporting
`contactless payment?
` What are the benefits and business case for adopting contactless
`payment?
` What does a merchant need to do to implement contactless payment
`at the point of sale?
` Are there issues for merchants to consider in a contactless payment
`implementation?
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`Contactless Payment: Overview
`The latest buzz in retail payment applications is contactless payment.
`Contactless payment is already being used in Asia, Europe, and North
`America. Contactless payments can include account-based payment,
`traditional credit or debit card payment, and even stored value payment.
`American Express, JCB, MasterCard, and Visa have all conducted pilot
`programs for contactless payment. Major cities around the world already use
`contactless cards for transit payment, with many major cities in the United
`States also implementing or planning to implement contactless card-based
`automatic fare collection (AFC) systems.1
`Consumers are already using a number of contactless payment options in a
`variety of situations. Consumers purchase gasoline, fast food, and groceries
`using ExxonMobil Speedpass(cid:140). They pay millions of dollars in tolls and
`fares using E-ZPass(cid:140) and similar transit and toll payment systems. What
`consumers value most about contactless payment is the speed and
`convenience offered by these (cid:179)touch-and-go(cid:180) or (cid:179)pay-with-a-wave(cid:180) payment
`devices.
`American Express, MasterCard and Visa have introduced contactless
`payment methods that help to standardize the technology and provide a
`reliable solution that can be easily used by consumers and cost-effectively
`implemented by merchants and acquirers. Both MasterCard PayPass(cid:140) and
`American Express ExpressPay(cid:140) implementations and Visa contactless
`specifications rely on the existing credit/debit card infrastructure to process
`contactless payment transactions. These payments typically replace cash or
`debit transactions, although they also replace low-value credit transactions.
`According to Ariana Michele-Moore of the U.S.-based research firm Celent
`Communications, three market segments are particularly ripe for the
`introduction of contactless payment: fast food restaurants, movie theaters,
`and video stores. These segments generated $160 billion in sales in the
`United States in 2002, of which almost 95% were cash sales. According to
`Michele-Moore, by 2007 contactless devices will account for 8% of the
`market represented by these three segments.2
`Currently, contactless payment devices use multiple form factors, ranging
`from traditional plastic cards to key fobs, watches, and mobile phones.
`ExxonMobil Speedpass and American Express ExpressPay use key fobs;
`ExpressPay will be available in card form in the near future. MasterCard
`PayPass is available as a card and was also piloted in Nokia mobile phones
`in the Dallas-Fort Worth metropolitan area. JCB is currently piloting a mobile
`phone in Japan that can be used for purchases at vending machines, train
`stations, corporate cafeterias, and entertainment venues. Visa has
`conducted contactless payment pilots using mobile phones in Asia and mini-
`cards with Bank of America in the United States. MasterCard anticipates that
`issuing banks will choose different form factors for competitive differentiation
`in various markets.3
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`1 See Appendix A for a description of contactless payment initiatives in process at
` U.S. transit agencies.
`2 Don Davis, (cid:179)The Rush to Contactless Payments,(cid:180) Card Technology, January 2,
`2004.
`3 Interview with Betsy Foran-Owens, Vice President, Product Services, MasterCard
`International, February 13, 2004.
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`ExxonMobil Speedpass
`Speedpass, introduced by ExxonMobil in 1997, was the first automated
`payment system to adopt radio frequency (RF) technology to help consumers
`make retail purchases. Today, over 6 million Speedpass customers frequent
`8,500 Exxon- and Mobil-branded locations around the world. Over 92% of
`Speedpass users report a high level of satisfaction.4
`ExxonMobil Speedpass resulted from a 1993 Mobil study that concluded that
`convenience, friendly service, and recognition of loyal customers create
`consumer loyalty and increase spending. The benefits of contactless
`payment to the consumer are straightforward: no foraging for change or bills,
`no handling of credit cards, no paper receipt to sign or keep track of, and no
`personal identification number (PIN) to enter or remember. In general, the
`entire transaction is faster and the customer is in control at all times.5
`Motorists enrolled in Speedpass use a key fob, a watch, or a transponder
`affixed to a vehicle's rear window to communicate securely with a gas pump
`or point-of-sale (POS) terminal. A reader integrated into the pump or
`terminal sends a signal to the customer(cid:182)s device, which replies with a unique
`identification code that is linked to the customer(cid:182)s account. Payment is then
`authorized, and the pump is activated or a purchase can be made at the
`convenience store. Consumers do not pay for the Speedpass device, and
`there is no consumer service charge for using it.
`Speedpass has recruited key merchants in other sectors (such as grocery
`stores and quick-service restaurants) to use the payment technology. For
`example, selected Stop & Shop supermarkets in the Boston area began
`using Speedpass in 2002 for payment, coupons, and a loyalty program.
`In December 2002, ExxonMobil Speedpass and Timex® introduced products
`incorporating the Speedpass transponder into 8 different versions of Timex
`watches. The watches look and function like regular watches, with the added
`feature of allowing customers to pay at locations accepting Speedpass.6
`Purchases of gasoline by customers at Exxon and Mobil service stations
`increased by 15% after customers became Speedpass users, resulting in a
`sales lift of 4%.7 (Sales lift is measured by comparing total gallons sold
`during the 12 months before implementing Speedpass with total gallons sold
`during the 12 months after Speedpass was implemented at each location.)
`The increase represents one additional gas purchase per month per
`Speedpass customer.
`MasterCard PayPass
`MasterCard PayPass(cid:140) is a new contactless
`payment program that provides consumers with
`what MasterCard calls (cid:179)The Simpler Way to
`Pay(cid:140).(cid:180) Consumers tap or wave a payment
`card or other PayPass device on a specially
`equipped merchant terminal, eliminating the need to swipe a card through a
`reader. The PayPass solution, introduced in 2002, targets quick payment
`environments where speed is essential, such as quick-service restaurants,
`gas stations, drug stores, supermarkets, and movie theaters. After
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`4 Texas Instruments RFID eNews, Issue No. 14, November/December 2002.
`5 Amy Cortese, (cid:179)Toolbooth Technology Meets the Checkout Lane,(cid:180) New York Times,
`July 7, 2002.
`6 See Speedpass Web site, www.speedpass.com.
`7 Matthew Miller, (cid:179)Received Wisdom,(cid:180) CommVerge, November 1, 2002.
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`successful pilots in Orlando, Florida, and Dallas, Texas, MasterCard is now
`proceeding with plans for MasterCard PayPass deployments in additional
`locations and is planning to start broader consumer deployments in several
`U.S. markets in 2004.8
`MasterCard International recently concluded a PayPass trial in Orlando,
`Florida with Chase, Citibank, and MBNA, that involved more than 60 retail
`locations and 16,000 cardholders.9 PayPass cardholders used their
`PayPass cards 23% more often than during the same period a year earlier,
`and the dollar value of their purchases (including purchases made using
`magnetic stripe technology) increased by 28%.10 PayPass usage continues
`to expand in Orlando.
`PayPass also moved customers through checkout lanes more quickly. The
`most significant time savings have been recognized in the drive-through
`environment, where PayPass shaved between 12 to 18 seconds off the
`purchase time as compared to cash. (According to former McDonald's CEO
`Jack Greenberg, unit sales jump 1% for every 6 seconds saved in drive-
`through lanes.)11
`In Dallas, Texas, MasterCard incorporated PayPass into
`Nokia mobile phones. A contactless chip and an RF
`circuit were embedded into the Nokia SmartCover
`phone. The chip was programmed with MasterCard
`payment account information. Initial results from the
`Dallas trial reinforce the conclusion that speed and
`convenience are the leading consumer benefits of
`contactless payment.
`The PayPass card uses an RF payment device
`conforming to the ISO/IEC 14443 standard to transmit
`payment information securely from the card to the
`merchant terminal. This device eliminates the need for a merchant to swipe
`the card through a reader, allowing the cardholder to remain in control of the
`card and decrease transaction time.
`In North America, where the majority of transactions are authorized online, the
`payment application data is based on the magnetic stripe information with
`additional security data. In regions where EMV12 smart cards predominate, a
`PayPass purchase can be conducted leveraging MasterCard M/Chip(cid:140),
`MasterCard(cid:182)s smart card credit and debit payment application. MasterCard
`has published PayPass M/Chip specifications that allow MasterCard smart
`cards to be handled across a contactless interface. These MasterCard
`PayPass cards can facilitate both contact and contactless payments from a
`single smart card.
`Implementation of PayPass is straightforward. PayPass uses standard credit
`card data for the payment transaction, leveraging the existing magnetic stripe-
`based payments infrastructure. Using Track 1 and Track 2 data allows
`merchants to retrofit current magnetic stripe POS terminals cost effectively to
`accept PayPass cards.
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`8 Interview with MasterCard International, op.cit.
`9 Ibid.
`10 Don Davis, op.cit.
`11 Ibid.
`12 Europay MasterCard Visa (EMV) specifications define a set of requirements to
`ensure interoperability between payment chip cards and terminals.
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`PayPass has been used successfully at a variety of merchant locations.13
`At the Pump. Consumers can use MasterCard PayPass at selected
`Chevron locations in Orlando, where gas dispensers are equipped with
`antennas and new POS terminals. The antenna powers the MasterCard
`PayPass chip, enabling the chip to transmit account information to the
`terminal. Transaction information is then converted into magnetic stripe
`format. The MasterCard PayPass POS application is supported without
`requiring significant modifications to the software at the gas dispensers.
`At the Movie Theater. At the Loews Universal Cineplex in Orlando,
`PayPass customers purchase movie tickets by tapping their cards on the
`cashier(cid:182)s glass window. Behind the glass window, a PayPass-enabled POS
`terminal captures the data, converts it to magnetic stripe format, and
`completes the transaction using the existing payments infrastructure. The
`same card can be used at the theater(cid:182)s concession stands.
`At the Drive-Through. MasterCard PayPass allows consumers to pay by
`tapping or waving the PayPass card at the menu order board at quick-service
`restaurant drive-through lanes rather than at the cashier window. When the
`customer drives to the cashier window, the cashier hands over the receipt
`instead of asking for payment. This eliminates the time required to deal with
`cash or process a magnetic stripe transaction and reduces the overall time
`for the customer(cid:182)s drive-through experience.
`Inside Quick-Service Restaurants and Convenience Stores. PayPass is
`being used in select McDonald's restaurants and Chevron convenience
`stores in Orlando. PayPass helps move customers through lines more
`quickly in these high-traffic environments, since it offers a more convenient
`payment process. Customers simply tap, rather than swipe their card.
`At Retail Locations. MasterCard has also deployed contactless payment
`solutions at general retail establishments such as Eckerd, Ritz Camera, and
`Boater(cid:182)s World. Merchants can accept PayPass without significantly
`modifying their POS hardware.
`By the end of 2004, MasterCard expects there to be millions of PayPass
`cards in the United States.14
`ExpressPay from American Express15
`ExpressPay from American Express is a
`contactless payment initiative that offers a
`quick and convenient way to make
`everyday purchases. ExpressPay uses a
`contactless smart chip built into a key
`chain attachment. American Express is
`piloting ExpressPay in Phoenix, New York
`City, and Singapore.
`ExpressPay is an easy-to-use alternative to cash for making purchases in
`merchant segments where speed and convenience are important, such as
`quick-service restaurants, supermarkets, drug stores, gas stations, and
`
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`13 MasterCard Fact Sheet, available at www.paypass.com/press.html
`14 (cid:179)MasterCard Orders Pay-With-A-Wave Chips,(cid:180) CTWeekly, December 10, 2003.
`15 (cid:180)American Express expands availability of new (cid:181)contactless(cid:182) payment product
`designed to make everyday purchases quick and easy,(cid:180) American Express press
`release, July 16, 2003.
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`corporate cafeterias. To make a purchase, users simply hold the key fob next
`to a contactless reader. The payment information is passed from the fob to the
`reader in milliseconds. Payment is authorized via the existing magnetic stripe
`payments infrastructure, and no signature is required.
`When consumers enroll in ExpressPay, they select the account to be used for
`transactions. Consumers have two options for funding ExpressPay:
` ExpressPay Direct Link carries a daily spending limit of $150 and links to
`an American Express charge or credit card for payment. Individual
`charges are recorded directly on the cardholder(cid:182)s monthly billing statement.
` ExpressPay Pre-Loaded can be prepaid up to $600 monthly, using any
`major credit, debit, or charge card (e.g., American Express, Visa,
`MasterCard, or Discover). ExpressPay can be reloaded automatically from
`the same payment source when the value drops below $20.
`As with all American Express Card products, customers are not liable for any
`fraudulent ExpressPay charges.
`The ExpressPay system conforms to the ISO/IEC 14443 standard,
`communicating the ExpressPay account information in Track 1/Track 2
`magnetic stripe format and processing the purchase as a traditional credit or
`debit card transaction. The contactless reader can be implemented easily at
`merchant locations, working with a merchant(cid:182)s existing POS system.
`Over 400 merchant locations in Phoenix and New York currently accept
`ExpressPay, including CVS/pharmacy, Blimpies, Baskin Robbins, Carl(cid:182)s Jr.,
`Dairy Queen, Chevron, and Fry(cid:182)s (Kroger). Over 200 merchants in Singapore
`currently accept ExpressPay, including BP and Starbucks. More than 15,000
`key fobs have been issued in all three locations.16
`According to American Express, the ExpressPay pilots in progress produced
`the following learnings:17
` ExpressPay is faster than other payment methods. A time-motion study
`revealed that, on average, ExpressPay transactions are 53% faster than
`paying with payment cards with no signature, and 63% faster than cash.
` ExpressPay demonstrated spend lift. The ExpressPay pilot results show
`that customer spending at participating merchants increased 20 to 30%
`compared to cash spending.
` Consumers immediately see the value with ExpressPay. In a survey of
`pilot participants, 93% of ExpressPay users indicated that they would
`(cid:179)definitely(cid:180) or (cid:179)probably(cid:180) use ExpressPay in the future if it were widely
`available. Furthermore, 87% agreed that ExpressPay is better than cash,
`and 82% agreed that it is better than cards. The pilots also showed that
`consumers will use ExpressPay daily, even if it is accepted in only one
`location. It appears that a much smaller level of acceptance is needed to
`make contactless payment viable for consumers, which facilitates a
`gradual implementation process for merchants.
` Merchants appreciate the speed of transactions and convenience of
`processing ExpressPay. In a survey of participating retailers in the
`Singapore pilot, American Express found that merchants liked the
`innovative nature of ExpressPay and see the product as a value-added
`service to consumers in their retail environments. In addition, retailers
`
`
`16 American Express web site (www.americanexpress.com/expresspay) and interview
`with David Bonalle, Vice President and General Manager of Advanced Payments
`Development, American Express, February 4, 2004.
`17 Interview with American Express, op.cit.
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`reported a high comfort level in using and processing ExpressPay
`transactions.
`American Express has also noted that interoperability among different
`contactless payment methods is a must. Interoperability opens up a new
`area for expansion by credit card companies by eliminating the risk for
`merchants who adopt contactless payment.
`The full ExpressPay rollout will include multiple form factors, and ExpressPay
`on a card form factor will be available in the near future. Consumer studies
`found that two-thirds of the respondents prefer the convenience of the key fob,
`while one-third prefer a card that can be carried in a wallet, primarily because a
`wallet is more (cid:179)protected(cid:180) than a set of keys.18
`
`Visa(cid:182)s contactless payment initiatives focus on unique local operating
`environments and the market demands of different regions.
`In the United States, Visa USA, in partnership with Bank of America,
`conducted an RFID-based contactless payment pilot, QuickWave, in
`Charlotte, North Carolina, with Bank of America employees. Launched in
`October 2002, the 6-month QuickWave pilot used a keychain mini-card that
`linked QuickWave account information to a credit or debit card account for
`processing through the traditional bankcard infrastructure. Bank of America
`issued 2,000 contactless payment devices, and about 30 different merchant
`locations participated (primarily in the quick-service restaurant segment).
`The QuickWave pilot also included a robust loyalty program and application
`that was linked to the merchant POS. The pilot ended successfully, with
`consumers valuing the speed, convenience, and ease of use, and merchants
`valuing the increased speed of the transaction. Bank of America is currently
`evaluating the case for broader deployment of contactless payment
`alongside traditional magnetic stripe payment.20 The preferred Visa
`contactless transaction model for the United States uses the ISO/IEC 14443
`standard to transmit Track 1 and Track 2 information, leverages existing
`merchant and acquirer infrastructure, and follows traditional credit, debit, and
`prepaid payment models. The contactless payment transaction is processed
`by the existing bankcard infrastructure, and the authorization and settlement
`processes are the same as for a magnetic stripe card.
`Visa International has also made significant progress in implementing
`contactless payment pilot programs using various technologies. Pilots in
`Japan, South Korea and Finland have used both RF and infrared technology
`for contactless payment.
`In September 2003, Visa released a new specification for contactless
`payment based on the ISO/IEC 14443 standard combined with the EMV
`credit/debit standard. The new specification allows a dual-interface chip to
`carry a smart Visa debit/credit EMV application for use in both contact and
`contactless environments. It also outlines requirements for a magnetic
`stripe-based contactless solution.
`
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`18 Interview with American Express, op.cit.
`19 Interview with Pam Skonicki, Director, Product Innovation and Coordination, Visa
`USA, February 26, 2004.
`20 Interview with Kelly Kruse, VP, Strategic Planning, Bob Maloney, VP,
`Debit/Emerging Payments, and Ellen Endicott, Senior VP, Government Card
`Services, Bank of America, February 10, 2004.
`
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`Visa19
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`Summary of Contactless Payment Initiatives
`Table 1 summarizes the status of the key U.S. contactless payment
`initiatives. American Express, MasterCard and Visa have all standardized on
`using the ISO/IEC 14443 standard for RF communication between the
`contactless payment device and reader and are using the existing magnetic
`stripe payments infrastructure to authorize and settle the transaction.
`
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`Table 1: Summary of U.S. Contactless Payment Initiatives
`
`
`Parameter
`
`Speedpass
`
`Region
`
`US, nationwide
`
`>6 million
`
`MasterCard
`PayPass
`
`Orlando, Dallas,
`New York
`>16,000
`
`American
`Express
`ExpressPay
`Phoenix, New
`York, Singapore
`>15,000
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`Bank of America
`QuickWave
`Charlotte, NC
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`<2,000
`
`Number of
`devices
`issued
`Merchant
`locations
`Marquee
`merchants
`
`7,500+
`
`60+
`
`600+
`
`30
`
`ExxonMobil,
`Stop & Shop
`
`Boater(cid:182)s World,
`Chevron, City of
`Orlando Parking,
`Eckerd, Loews
`Universal
`Cineplex,
`McDonald(cid:182)s, Ritz
`Camera, Wolf
`Camera
`Card, phone
`Others planned
`
`ISO/IEC 14443
`
`Pilot complete,
`with rollout
`planned in 2004
`
`CVS/pharmacy,