An embedded radio chip in credit cards could change the way we use our plastic friends when making purchases in retail establishments. The magnetic strips we've become accustomed to on the backs of our credit cards are sharing the small surface area with something called “radio frequency identification”, otherwise known as RFID, and may someday make “swiping” credit cards a thing of the past. The RFID system would let credit card users hold their card within an inch or two of the card reader to make a purchase- similar to the EZPass for the NY State Thruway, or the gas pumps that accept special key chains at the sensor to process your payment. You would no longer hand your card to the cashier, there would be no swiping to read the magnetic strip on the back of your card, and therefore, it would be considered contact-less payments.



Consider the television remote control. It magically changes the channels and adjusts the volume from across the room- all without contact with the television. That same technology can, and has already been used to power your credit card payments when shopping!

There are currently a few card lenders trying out these contact-less credit cards, including some of the larger banks; Key Bank, Wells Fargo, Bank of America, Chase, American Express and Citibank, mainly in the cities of New York, Connecticut, Atlanta and Denver. There are over 90 million RFID credit cards in use by Chase customers alone, using a technology Chase has labeled “Blink”. If you have a Chase credit card and would like to use the “Blink” system for contact-less payments to try it out, you can do so even if you are not in one of the four pilot cities- just call customer service and request one.

At this time, there are about 30,000 out of over 5 million retail locations throughout the United States where a contact-less credit card would work. It's a small number compared to the number of potential merchants who may someday be accepting contact-less payments; but the number is expected to go up as more banks issue cards with the radio chips embedded into the plastic.

Many people might argue that the magnetic strip system was working just fine, and if “it ain't broke, don't fix it”, right? What's the big deal about contact-less payments? Speed, of course. In a time when everything is rushed, and people are constantly sprinting from one activity to the next, speeding up transactions benefits both the consumer and the merchant. In places of high-volume sales transactions, like fast-food retailers, sports venues, movie ticket counters and public transportation, writing checks, swiping credit cards and counting out cash takes quite a bit of time. You'll notice most of these locations often have long lines of people waiting to pay. With a contact-less credit card, the cardholder would flash their card to the reader and if the transaction is under $25, they wouldn't even have to sign a receipt. Visa's director of corporate relations, Elvira Swanson states that the contact-less credit card purchases are about 25% faster than cash transactions.

The radio frequency cards might also help consumers who have credit cards with magnetic stripping that has been damaged. It can be a highly embarrassing experience for consumers who have their credit card declined, particularly when they know there is available funds on the card. With the radio frequency, contact-less payments option, the strip could be rubbed completely off the card and you'd still be able to make your purchase.