Atmel and OTI Announce First Major Order for PayPass Gear

On Track Innovations Ltd. and Atmel Corp. announced today they have received the first order for microprocessors in “commercial quantity” for MasterCard International's PayPass contactless payment program. OTI said it also expects orders for card readers to support rollouts of PayPass cards by issuers later this year. The two companies said this development follows certification recently received from MasterCard for their jointly developed system for PayPass. Atmel, San Jose, Calif., is a chipmaker and OTI, an Israeli company with U.S. offices in Cupertino, Calif., supplies contactless operating systems, card readers, and inlays, or the card-based antennae that transmit account data to card readers via radio waves. “It is very gratifying to see the first fruits of the close teamwork between Atmel and OTI in developing and bringing to market MasterCard PayPass,” said Jeff Katz, vice president of marketing at Atmel, in a statement. MasterCard began rolling out PayPass this summer following tests last year and in 2002 in Orlando, Fla., and Dallas. Last week, fast-food giant McDonald's Corp. became the first major deployer of the technology, announcing it would install readers in 715 stores in New York, Orlando, and Dallas, as part of an initiative begun earlier this year to extend credit and debit card acceptance to all 13,500 stores in its U.S. chain (Digital Transactions News, Aug. 18). For PayPass, McDonald's is using terminals from VeriFone Inc. equipped with radio-frequency modules from Vivotech Inc. PayPass users tap or wave their cards on or near a reader rather than swipe them. Account data stored in a chip in the card is transmitted via radio signals, after which the transaction is processed as if the card had been swiped. PayPass cards also bear magnetic swipes and can be processed conventionally. American Express Co. is testing a similar technology, which it calls ExpressPay, in Phoenix, relying on keyfobs rather than cards. MasterCard's PayPass test in Dallas last year used cell phones from Nokia, but the card company's rollout so far has relied exclusively on cards. The Atmel chip developed for PayPass, an 8-bit microcontroller similar to other chips the company has made for banking applications, is compliant with the International Standards Organizations's ISO 14443B standard, which the card companies have settled on for RFID payment. OTI, which has worked with MasterCard on PayPass since early in the contactless system's development, says it has integrated its inlay with major card vendors in the U.S. and its card reader with point-of-sale processors. “We look forward with great anticipation to the next and future stages of the rollout,” said Oded Bashan, president and chief executive of OTI, in the statement.