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Contactless payment systems (also known as “touch and go” or “wave and pay” or touchless “payment”) are credit cards and debit cards, key fobs, smartcards or other devices which use RFID (and NFC – Near Field Communications) 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 in the US and under £15 in the UK, some research indicates that consumers are likely to spend more money due to the ease of small transactions. MasterCard Canada says it has seen “about 25 percent” higher spending by users of its PayPass-brand RFID credit cards.
Much of the discussion at Mobile World Congress has been about turning the mobile phone into a payment device.
Handset manufacturers, network operators and even the boss of Google have been talking-up Near Field Communication (NFC).
The technology allows nearby devices to exchange data – for example a sales transaction – and is seen as a way for mobiles to replace the plastic in people’s wallets.
At MWC, Orange announced it would be partnering with Samsung to roll out NFC-based contactless systems across Europe.
Smart shopping
Meanwhile Google chief executive Eric Schmidt looked forward to a time when NFC would help him buy trousers.
In his keynote address, Mr Schmidt said NFC “should revolutionise payments when tied to advertising and location”.
He offered a scenario.
“I’m walking down the street and I need pants [trousers]. My phone has an NFC chip. It knows where I am.
http://www.bbc.co.uk/news/technology-12478643
The call for an end to physical cash payments has sounded once again, this time following an agreement between Orange and Barclaycard to co-develop contact-less payment services for mobile phones.
The duo will launch co-branded contactless payment products and services based on near-field communications (NFC) technology, allowing you to simply wave your mobile over an in-store reader to pay for, say, a train ticket.
Although neither firm’s said anything concrete about what hardware the partnership will eventually herald, they did state that the joint venture will result in contactless services for ticketing, transport and rewards. We assume the latter could mean airtime vouchers and credit card points.
“Today you pay for things by cash or on your credit card. Tomorrow, you’ll use your mobile to buy the things you want,” said Tom Alexander, head of Orange UK.
http://www.reghardware.com/2009/03/09/orange_barclays_nfc/
Contactless payment cards explained along with UK progress for Summer 2011
Barclaycard’s OnePulse also works as an Oystercard.
First up was Barclaycard which last year launched a credit card which allows contactless payments plus an built in Oyster card for travel around London.
The ‘wave and pay’ technology on the OnePulse card can be used to buy everyday items that cost less than £10, such as sweets or a magazine, by touching the card on a special OneTouch reader.
Among the companies accepting OneTouch payments are Books etc, Coffee Republic, Eat, Krispy Kreme, McDonalds, Thresher and Yo! Sushi.
Barclays is now launching a national scheme where contactless technology is incorporated into customers’ standard credit and debit cards.
By the end of 2008, Barclays aims to have 20,000 shops around the UK taking part. It plans to introduce the one touch cards gradually, as existing cards expire, but you will be able to apply sooner if you want one.
Oyster card
The card also includes an Oyster card for travel in the capital on the tube, buses, trams and the Docklands Light Railway.
The OnePulse card also works like an ordinary credit card for purchases over £10 and all normal credit card and OneTouch transactions are debited directly from a customers Barclaycard.
OneTouch payments will appear with an asterisk on monthly statements.
A transaction won’t usually require a PIN – although Barclaycard says that occasionally you may be asked to enter one for security purposes - and if you want a receipt the retailer can supply one.
There are no limits on the number of transactions allowed as long as they are under £10 and stay within the user’s credit limit. They then appear on the regular monthly statement.
http://www.which.co.uk/money/credit-cards-and-loans/guides/contactless-payment-cards-explained/uk-progress/
Contactless payments is all about harnessing innovative technology to save you time and effort. Integrated into your card, it means you can quickly pay for those items £15 or under like coffee or lunch without having to search around for cash. As well as being quick and easy, it’s secure, so you can shop with confidence. Just look out for the wave symbol.
Near field communication, or NFC, is a set of short-range wireless technologies, typically requiring a distance of 4cm or less. NFC operates at 13.56 MHz and at rates ranging from 106 kbit/s to 848 kbit/s. NFC communication always involves an initiator and a target: the initiator actively generates an RF field that can power a passive target. This enables NFC targets to take very simple form factors such as tags, stickers, key fobs, or cards that do not require batteries. NFC peer-to-peer communication is also possible, where both devices are powered.
Reuters ran an article a few weeks ago entitled "Mobile phone payments 'pose huge fraud risk'." The story quoted Greg Day, an analyst at security specialist McAfee, as saying near-field communications (NFC) used for phone payments represent an opportunity for sophisticated criminals to steal a lot of money.
Day doesn't point to any significant flow in the technology, but is quoted as saying, "The mobile space is fraudsters' biggest opportunity for the future, largely because many people still see their phone as a communication device, rather than something that they have to keep secure."
In fact, a group of hackers at a conference recently claimed they can break into NFC phones. Even if that's true, however, it doesn't mean NFC phones "pose the greatest future threat to the security of consumers' financial details."
Day says thieves could steal small amounts of money often to reap huge sums. But the industry is already responding to potential fraudulent transactions. One protection is the Card Verification Value code (CVV, also known as CVC). Each credit-card number is associated with a three- or four-digit code, located on the back of the physical card. It's static on all mag-strip cards, but it's dynamic on an NFC phone. So if a legitimate NFC phone is used, a new CVV is assigned. If a bogus phone is then used, it will have the wrong CVV and the transaction won't go through.
Contactless Payments and Touchless Payments are due to hit the UK majorly in Summer 2011.
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