Adding a radio chip to credit cards could change how we use them to buy things in stores. The magnetic strips we're used to seeing on the backs of our credit cards are now sharing the small surface area with something called "radio frequency identification," or RFID. RFID may one day make "swiping" credit cards obsolete. The RFID system would let credit card users make purchases by holding their card within an inch or two of the card reader. This is similar to how the EZPass for the New York State Thruway or the gas pumps that let you pay with a special key chain work. You wouldn't have to hand your card to the cashier, and there wouldn't be any swiping to read the magnetic strip on the back of your card. This would be called a "contact-less payment," because you wouldn't have to touch your card at all.
Think about the remote control for the TV. It changes channels and adjusts the volume without touching the TV. You can do this from across the room. That same technology can and has already been used to process your credit card payments when you shop.
Some big banks, like Key Bank, Wells Fargo, Bank of America, Chase, American Express, and Citibank, are testing out these contactless credit cards right now, mostly in the cities of New York, Connecticut, Atlanta, and Denver. Chase customers alone use more than 90 million RFID credit cards, which use a technology called "Blink" by Chase. If you have a Chase credit card and want to try out the contactless "Blink" payment system, you can do so even if you don't live in one of the four pilot cities. Just call customer service and ask for one.
At the moment, a contactless credit card can be used at about 30,000 out of the more than 5 million stores in the United States. It's a small number compared to the number of businesses that might accept contactless payments in the future. However, the number is likely to grow as more banks start giving out cards with radio chips built into the plastic.
Many people might say that the magnetic strip system worked fine, and if something isn't broken, you shouldn't fix it, right? What's the big deal about paying without touching a card reader? Obviously, speed. In a time when everyone is always in a hurry and running from one thing to the next, speeding up transactions is good for both the customer and the business. Writing checks, swiping credit cards, and counting out cash take a lot of time in places where there are a lot of sales, like fast-food restaurants, sports arenas, movie ticket booths, and public transportation. At most of these places, you'll see that there are often long lines of people waiting to pay. With a contactless credit card, the cardholder would just flash the card to the reader. If the transaction is less than $25, they wouldn't even have to sign a receipt. Elvira Swanson, who is the director of corporate relations for Visa, says that contactless credit card transactions are about 25% faster than cash transactions.
People who have damaged magnetic strips on their credit cards might also be able to use the radio frequency cards to use them. Consumers can feel very embarrassed when their credit card is turned down, especially when they know there are funds on the card. With radio frequency, contact-less payments, the strip on the card could be completely rubbed off and you could still buy something.
