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Contactless credit
cards
Deepak Bagai
 CREDIT
cards have penetrated the grassroots of modern economy and given a boost
to the concept of plastic money. The account information is stored on a
magnetic strip, which is swiped by the card reader when a transaction
takes place. The traditional method involves the handing over of the
plastic, to the retailer, by the customer for card swiping and the
corresponding approval from the bank. The receipt generation process
follows this. Mastercard and American Express are in the process of
testing the "contact less" versions of their credit cards for
the launch in the market, which is supposed to be fully in place by 2005
if things go as planned.
The contactless credit
card needs only to be held near the card reader for the sale to take
place. These cards update their data on chips embedded on the plastic.
It may actually not leave the hand of the customer. These cards differ
from the existing magnetic strip cards as they have chips tuned for
radio frequency identification (RFID). The cardholders need not even
remove the card from their wallets. The biggest merit in such cards is
the speed and security, as the card never leaves the hand of the client.
The contactless cards do not have any battery and are triggered in the
vicinity of the card readers’ electromagnetic waves. A small radio
antenna is built in the card to transmit the information instantly to
the reader. The transaction then goes through the credit card network in
the similar fashion as if the card has been swiped.
The contactless cards will
come to the mainstream if the common standards are at place. EMVCo has
been formed to ensure that a single terminal and card approval process
is developed which ensures cross payment system interoperability through
laid down EMV specifications. The
EMV standard has been developed by Europay International (now Mastercard
Europe), Mastercard International and Visa International to standardise
operations among various payment systems. EMV is a global standard for
the design, security, and functionality of smart card terminals and
applications that applies to credit card issuers, processors and
terminal manufacturers.
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