Contactless Cards Proving To Be More Paymentless Than Contactless

Written by Evan Schuman
February 22nd, 2008

Contactless cards—which have been pushing accelerated checkout as both a consumer and retail benefit—are running into isolated problems with both.

Even though banks have been sending contactless cards to many consumers as replacement cards, a surprisingly large number of those consumers don’t even realize the cards in their wallets are contactless, which explains why relatively few consumers are using the contactless POS devices at their local retailers.

I’ve been trying to disprove these concerns and have been failing miserably. Taking some cabs in New York City this month, I was thrilled to see the contactless devices in the backseat, only to be told by three different cabbies to not use them because customers were complaining about getting double-billed.

Cynically, I thought, maybe the cabbies have some financial incentive to poo-poo the wireless cards.

This week, visiting three different grocery chains in New Jersey, tried unsuccessfully to use my contactless card there. The first time, a cashier looked at me as I asked about using my contactless card.

"It never works," she said. In what way? "It will take the card and then tell you that the card’s been declined. But if you then slide it (magstripe scan), it will instantly go through." Showing kinship with Iowans, I tried it. Sure enough, it errored in the exact way the cashier had described.

I deliberately tried the same effort at two other chains, discovering the same problem, with cashiers and managers telling me that it’s common.

That said, I was able to find one fastfood chain whose POS did accept my contactless card.

The point is not that contactless payment doesn’t work well. Clearly, it works well enough in plenty of locations. But that contactless has a much bigger foe than antennae-equipped cyberthieves or malfunctioning POS interfaces: apathy.

The way these cards have been marketed and distributed is, at our most kind, lethargic. They’re being sent with tiny declarations, the size and tone of a legal boilerplate announcing some privacy policy change.

In the field, what kind of spotchecking of the equipment is happening? Are contactless backers not the least bit curious why the usage rates are so low? Are they concluding that the U.S. public doesn’t want it, when the devices were never given a realistic chance?

Contactless is supposed to be effortless for the consumer, not for the banks and retailers trying to make a go of it. As the Bard would have said, probably when his contactless card proved to be more paymentless than contactless for the fourth time, "The bank doth protests too little, methinks."


2 Comments | Read Contactless Cards Proving To Be More Paymentless Than Contactless

  1. CybAlert Says:

    I live in New York. In 30 years I don’t believe I’ve ever been in the same taxi cab, no less seen the same taxi cab driver twice.

    How would three cabbies know their customers were double billed ? Credit card processors do not go to the terminal operator when there is a duplicate charge with the same timestamp and reference number.

    I believe you’re taking a story that is circulating because cabbies do not want to accept credit cards of any type. Cabbies want good old American cash and they don’t want to pay credit card fees. Has nothing to do with contactless. But the City is ‘requiring’ cabs to accept credit cards and have GPS installed.

    AS to issuance of contactless cards, you’re absolutely correct.

    If I’ve received a contactless card from Chase, CitiBank, Discover, Bank of America or Amex none of them bothered to tell me the card is contactless.

    How does a consumer validate a card is contactless without looking like a fool at CVS ?

  2. Evan Schuman Says:

    Editor’s Note: Thanks for the comment. As for the cabbie, you’re right that the processors wouldn’t go back to the cab company, but the consumer–seeing it–would likely call the cab company, so it seems plausible.
    As the piece noted, it sounded as though it might have been cabbies discouraging contactless, but they all suggested using the card outright. If the cabbies wanted to discourage credit cards, they didn’t try.
    As for the card identification, the cards should have a wireless icon on them, but it blends in, looking like just another logo.


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