Digital Transactions Authoritative, insightful and timely information for payments professionals
MasterCard International and Visa International, which are now both offering platforms in the U.S. for contactless card transactions based on radio-frequency identification technology, have agreed on a common communications protocol and on testing requirements for the technology. The agreement should mean that payment devices branded by one of the associations will work with readers branded by the other. The common protocol, the card networks said today in a statement, will also “enable vendors to streamline product development and testing, leading to reduced implementation costs and faster time to market for financial institutions and merchants.” It should mean less testing and programming time for merchants, as well, the statement says. The agreed-upon protocol is MasterCard's PayPass ISO/IEC 14443 specification. MasterCard rolled out is PayPass contactless program last year after tests in Florida and Texas with both cards and cell phones as payment devices. So far both McDonald's Corp. and Sheetz Inc., a convenience-store chain, have adopted the technology, which promises to allow high-throughput, cash-heavy merchants to accept electronic payments by speeding up tender time. Visa has tested contactless technology overseas but only last month announced it had created a platform for the U.S. market (Digital Transactions News, March 1). Contactless payments replace conventional card swipes with radio signals transmitted from a chip embedded in a payment device?usually a card, but sometimes a fob or mobile phone?to a reader hooked up to a card terminal. Once the terminal receives the signal, which carries card-account data, the transaction proceeds as if a card had been swiped. By slashing tender time, the technology promises to open markets for electronic transactions, including fast food, where speed is essential and average tickets are low.
