MasterCard International has begun public trials of a 'contactless' payment card which enables payment details to be transmitted wirelessly when cards are tapped or waved at a specially equipped merchant terminal.
Mastercard is currently working with US banks Chase, Citibank and MBNA, to trial the 'tap & go' scheme with merchants in the Orlando, Florida area.
The PayPass card features a hidden embedded computer chip and antennae which transmits payment details to the terminal, eliminating the need to swipe the card through a reader and allowing consumers to keep hold of the card at all times.
The contactless card, which also incoporates conventional chip and magnetic stripe technology, is based on ISO 14443 telecommunications standard and transmits data via radio frequencies.
Mastercard says the new solution is ideal for traditional cash-only environments where speed is essential. Initial results from an employee pilot at the card company's New York headquarters showed that purchase transaction time was reduced by up to 64 per cent. In addition, the average transaction amount increased by 10 per cent when using a payment card in lieu of cash.
MasterCard recently completed extensive consumer research that indicated 63 per cent of consumers surveyed said that they would "definitely" or "probably" use PayPass if their bank offered it to them. Consumers who would "definitely" use the card indicated that it would replace cash in more than half (53 per cent) of their future transactions.
Visa has also recently announced plans to develop a 'contactless' payment specification, based on the same ISO standards as Mastercard's offering, where a chip embedded in a plastic card or an electronic device such as a mobile phone is held in front of a terminal and payment details are transmitted by a wireless interface.