Discover’s Embrace of ViVOtech Hints at Bigger Contactless Plans

Discover Network's recent certification of ViVOtech card readers indicates Discover is moving ahead with a contactless card program, but the No. 4 general-purpose card network is staying mum about the details. Discover says it has certified several readers from Santa Clara, Calif.-based ViVOtech Inc., a specialist in contactless payment hardware, including the ViVOpay 4000 and ViVOpay 3000 models for use with what a Discover release calls “Discover's fast, secure, and simple contactless payment system.” But Discover Network, the acceptance unit of Riverwoods, Ill.-based Discover Financial Services LLC, won't say much else about that payment system. Asked about specific plans, a spokesperson said in a statement that, “We are highly focused on a number of strategic business initiatives that will increase our acceptance and allow us to deliver even greater value to a growing number of merchants and issuers. Contactless payment is one of the ways we are expanding our product offerings and functionality. This certification brings us one step closer to providing our customers with even greater convenience and simplicity through Discover Network contactless payments.” The spokesperson added that no launch date is set. The certifications mean the ViVOtech products, which use radio-frequency technology to move data between the card and terminal, are interoperable with Discover's network systems. The spokesperson says Discover picked ViVOtech to supply the first readers for its contactless program because of ViVOtech's “experience, expertise, and technology,” but indicates Discover may use other vendors' readers too. Discover refuses to say how many of its 4-million-plus merchant locations will get contactless terminals. On the issuing side, the spokesperson indicates that whatever program rolls out could involve cards issued by several banks Discover has lined up to offer Discover-branded products on its network. Contactless payment, widely seen as a technology that allows high-throughput, small-ticket merchants, such as fast-food chains, to accept electronic payments, has gained considerable ground in the past year with both issuers and merchants. MasterCard Worldwide and American Express Co., with their PayPass and ExpressPay programs respectively, were the first big networks to go after the contactless market. After first giving contactless the cold shoulder, Visa USA reversed course last year (Digital Transactions News, March 1, 2005), introducing its Visa Contactless platform in the U.S.