MasterCard International yesterday introduced its new payment technology, PayPass, to Taiwan's banks and card issuers at a seminar in Taipei, aiming to offer a quicker service process and lower fraud risk.
"`Contactless' payment is about fast transactions," said Shuan Ghaidan, MasterCard's vice president of Asia/Pacific advanced payment systems. "It can speed up the transaction process and bring convenience to the cardholders."
PayPass allows cardholders to make payments via tapping or waving their cards in front of card readers. The technology would replace the current process whereby salespeople or cashiers swipe the cards through readers.
The technology is designed for retailers requiring quick service, such as fast-food restaurants and movie theaters, or convenience transactions like gasoline purchases and parking.
"These `contactless' payments can effectively lower the risk of credit cards being counterfeited as the whole transaction can be completed by cardholders alone without the cards needing to be handled by other people," said Julie Yang (
The technology can be applied to both chip and magnetic credit card by adding a microchip that can transmit account details wirelessly. The chip would cost banks and card issuers around US$1 per card.
New card readers would cost around US$100 each, while a whole new set of terminals would cost US$400 to US$600 each, the company said.
The payment mechanism was used in a trial in Orlando, Florida, last year. For the trial, the company collaborated with the US' three major issuers, JP Morgan Chase, Citibank and MBNA to issue 20,000 cards that can be used at 60 retail locations.
The technology did not seem to arouse much consumer interest, however, according to a report published by CNET News on its Web site on Dec. 19.
The report cited Chung Tran, the manager of an Orlando-area McDonald's, as saying that few customers had used the payment system and always asked what the card reader is.
The nationwide rollout of PayPass in the US started last month. The company is now promoting the technology in Asian countries, including Taiwan, Japan, South Korea and Hong Kong, and expects to launch the product in Asia this year.
Nevertheless, local banks and issuers seemed lukewarm about the technology.
"It is a mature technology and we do have an interest in it," said Michael Chang (
"But we are still observing its practice in other countries and evaluating how much more we and what kinds of business can benefit from this technology," he said.
Fubon Commercial Bank (
"Besides the cost, whether the technology can be compatible with the system to be used for the full-scale transformation into chip credit cards by 2006 is another concern for us," said Tiger Chan (
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