AmEx Will Expand ExpressPay And Promote a New Incentive

American Express Co. this Friday will begin adding more merchants in lower Manhattan in its test of radio-wave technology for payment transactions. Over the next several weeks, three quick-service restaurants near the card company's headquarters will begin accepting the card company's experimental ExpressPay RIFD keyfobs, which communicate with conventional card terminals via radio receivers AmEx provides merchants, rather than through conventional card swipes. The so-called contactless technology, which relies on a microprocessor chip and tiny antenna embedded in each fob, is already being tested at an Eckerd's drugstore and at the Mercantile Exchange and NY Waterway, a ferry operator, in the same area. A broader pilot of the same technology has also been under way in the Phoenix area since July (Digital Transactions News, Nov. 4, 2003), and yet another test is in progress in Singapore. Gail Francolini, vice president of advanced payments development at AmEx, announced the expansion of the New York test in a presentation she gave today at the CardTech SecurTech exposition in Washington, D.C. She would not name the merchants, other than to say they are recognizable names in the quick-service category. At the same time, she told Digital Transactions News AmEx would begin publicizing an incentive it recently added to its ExpressPay pilots to build participation and usage. Under the program, the card company offers to take 25% off purchases made with ExpressPay fobs. AmEx is funding the discounts by taking them off cardholders' statements. ExpressPay payments can be linked either to AmEx card accounts or to AmEx prepaid accounts funded by other cards. AmEx's tests of RFID technology so far have shown that it can produce average tickets ranging from 17% to 33% greater than cash payments, Francolini said, adding that the technology slashes average tender times by 53% compared to cards not requiring signatures and by 63% compared to cash. AmEx's measurements have shown cash times to be 33.7 seconds, cards 26.7 seconds, and ExpressPay 12.5 seconds. With some 20,000 fobs now in circulation, AmEx has so far experienced no fraud on the devices, even though nothing prevents persons other than the fob owners from using them, Francolini said. “This new technology has legs,” she said. “It's not a solution looking for a problem.” Last week, the company announced it would introduce the ExpressPay technology to Blue cards it will issue for the Phoenix test, beginning next week. The Phoenix market is so far the only one in which non-fob form factors are being used, but the company clearly expects to test various devices. “We have designed ExpressPay to work on a myriad of form factors,” said Francolini.