North American Bancard Gives Out Contactless Payment Systems

When a merchant has a ViVOpay 4000 reader, a customer can tap the card against the reader or hold it 3 to 5 centimeters away. The reader's RF antenna interrogates the card's RFID chip, which then sends the card data (which amounts to a credit-card number) to the reader. That data is then processed by the reader and sent to the VeriFone Vx570 terminal via a serial interface cable.

The entire transaction takes two to four seconds, Khan says, and if the payment is less than $25, no signature is required. The reader measures about 5 inches by 4 inches by .7 inch, and can be mounted on a sales booth or drive-through window, or placed on a checkout counter.

NAB is not the only independent service organization (ISO) showing an interest in contactless readers, according to Khan. In the past three months, ViVOtech has sold more than 10,000 such readers to ISOs, which, like NAB, process online credit-card transactions. ViVOtech has offered its contactless readers for about four years, Khan says, while the first two years were pilots. Since then, sales have been increasing.

The readers offer three benefits for NAB and its retailer customers, Khan explains: allowing NAB to grab the market share of merchants that use credit cards but do not have contactless payment services; improving sales transaction times for existing markets; and bringing contactless card payments to fast-food restaurants, convenience stores, mom-and-pop shops and other merchants that have, until now, been cash-only establishments.

MasterCard recently completed a study of its contactless payment system, PayPass. The study determined that consumers use their payment cards approximately 18 percent more often than non-contactless cards (see RFID Changing Buying Behavior). About 75 percent of the transactions were for purchases less than $25.

ViVOpay readers are also compatible with near-field communications (NFC) technology for RFID-enabled mobile phones, Khan says. Consumers with mobile phones equipped with NFC semiconductor chips will be able to pay using a handset in the same manner as with a credit card.