Summary:
Contactless cards will pave the way for greater profits with their higher efficiency. The cards emit a radio signal from a smart chip, which provides more secure encryption, are embedded in the card which sends out a radio signal for a wireless transaction for purchases under $25.00 with no chargeback to the merchant. The new cards have compatible accessories with present readers to accept them and eventually will replace cash because they’re faster, more convenient and cost less to receive due to a less shrinkage and labor involved. Studies done by Visa and MasterCard show that transactions using contactless payment were twice as fast as magnetic strip cards and three times faster than cash transaction. This decrease in time is crucial to merchants with a small time frame to serve customers, such as fast food restaurants, convenience stores and drive-thrus. Contactless cards are becoming more and more widespread with many new businesses adopting it and with commercials airing their Pay Pass cards nationally.
Connection:
In relation to chapter 14, the new contactless cards will affect the consumers and merchants with their quick and cost effective capabilities. These cards are more time efficient than magnetic strip cards and cash, which makes businesses with a limited time frame to service customers able to process more transactions in the same time frame and ultimately earn greater profits. The improved security features also benefit businesses as the number of frauds will decrease and therefore they will retain more profits, because in the event of a credit fraud, the business will be held responsible and lose their revenue. The convenience these new cards bring could lure in consumers to businesses equipped with this technology if they are short on time and are in need of something that they can obtain quickly, the consumer could choose your store than a closer or cheaper store that does not have contactless technology equipped.
Reflections:
Contactless payment will start to trend as more and more businesses and especially those that are convenience based are adopting the new technology in hopes of attracting more consumers. With more competitors offering the same technology, the cost of implementing these will decrease and become more affordable. Also with brand names such as 7-Eleven, McDonalds, KFC, and CVS equipping them with contactless card readers, as a result smaller brands will be pressured into upgrading too, which makes it even more convenient for us, the consumers. I think that this innovation will be effective in increasing the efficiency of transactions. Also the controversies concerning the radio signal emitting chip could be tapped by others and used to commit fraud are over exaggerated because to be able to receive the signal emitted, the receiver would be in close proximity to the card. I would think the card owner or clerk would notice such suspicious looking equipment right next to their checkout desks. I think that it’s only a matter of time before contactless payment becomes mainstream replace conventional magnetic strips and cash.
