Taiwan trials contactless credit cards

A test of radio frequency credit cards in Taiwan found that consumers were able to pay for products seven times faster, organisers announced yesterday. The consumers also spent twice as much as usual.

The cards use a variety of radio frequency identification (RFID) known as Near Field Communication (NFC).

One store reported that customers paying with NFC-equipped Visa cards took only four to six seconds per transaction, compared with as much as 35 seconds for payments with magnetic strip cards.

The average queuing time for customers was reduced by 77 per cent, and customers spent 2.3 times more than shoppers paying by cash because payment was easier, Visa claimed.

The company did not provide precise details of the size or duration of the trial, but said that the cards were being tested at branches of four major chain stores by Visa and Japan-based credit card issuer JCB. 

"JCB's adoption of Visa's contactless specification moves the whole payment industry closer to a single interoperable platform that works for all brands," said Rahul Khosla, a general manager with Visa Asia Pacific.

A pilot test in Europe late last year saw the NFC chips embedded in Nokia mobile phones. 

"Customers mentioned how quick and easy it was to pay for a cup of coffee on a busy day," said Hajime Matsuura, manager of JCB's Amsterdam office.

"They do not need to fumble in their pocket or purse to find small change, and merchants benefit from the fact that lines proceed faster at the cashier."

The cards communicate with receivers via 13.56MHz radio waves which induce a magnetic field in the receiver.

Like other RFID systems, NFC has given rise to concerns that its signals could be monitored by a third party for fraudulent purposes.

Proponents claim that the interception of NFC signals is impractical because they are designed to work at a very short range of less than 5cm. Sensitive applications like payment systems use strong encryption in an effort to protect data.

Unlike chip and Pin payment systems, the Visa cards do not require the user to enter a number to verify their identity during every purchase.

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