Wave and Pay With a Wireless Credit Card
May 20, 2005 — -- In this week's "Cybershake," we take a look at a new credit card system that lets customers pay for things with a simple wave. Plus, we track how Tiger, Apple's new operating system software, is doing in the wild world of Mac users.
What do you pull out of your wallet when you reach the sales register at a retail store? Using cash can be quick -- if you have enough bills for pricey purchases. Credit cards can be convenient, but slow since you have to wait for the bank's authorization. And you'll have to keep track of all those charge slips to prevent identity theft.
But on Thursday, Chase announced a new payment system called "blink" that the company believes could offer the speed of paper with the convenience of plastic.
The new technology is essentially a credit card embedded with a radio-frequency ID microchip that contains encoded data. To pay for a purchase, consumers merely wave the card at the store's register and an RFID terminal wirelessly reads the card's data to process the payment.
Thomas O'Donnell, senior vice president of Chase card services, says that since consumers don't have to hand over their cards to store employees, "We think we have found a way, with blink, to make that checkout faster."
On average, O'Donnell says the wireless blink technology will reduce the amount of time consumers spend at the sales register by up to 30 percent to 40 percent. Another plus: Unlike traditional credit card sales, blink transactions won't require a customer's signature to complete the purchase.
Detractors worry that the wireless system could lead to new instances of high-tech fraud or identity theft. But O'Donnell says the blink cards -- which can also be used like traditional credit cards through "swipe" readers -- are hardened against electronic attacks.
"The card itself is safe and secure. It uses the highest level of data encryption available," says O'Donnell. And since the card never leaves the customer's hand, there's less chance the card will be misplaced or even misused by an unscrupulous store clerk. What's more, blink users won't be liable for any fraudulent charges -- just like traditional credit card customers.
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