RF-Based Contactless Payment: A More Convenient Way to Pay

Transcription

1 RF-Based Contactless Payment: A More Convenient Way to Pay White Paper - Version 2.0 April 2004 ViVOtech, Inc. 451 El Camino Real Santa Clara, CA Ph: , ext [email protected]

2 About ViVOtech ViVOtech Inc enables more than 30 million new and existing merchant Point of Sale (POS) systems with rapid, scalable and cost-effective deployment of secure contactless card and mobile device payment capabilities. ViVOtech uses its unique Dynamic Strip technology to upgrade an existing POS terminal in minutes with no POS software change. ViVOtech has more than ten patents pending on various enabling technologies. The company is privately held and headquartered in Santa Clara, CA. ViVOtech Inc. s management and advisory board include former executives from First Data Corporation, Citibank, Diebold, Intuit, McCaw Cellular, Target Corporation, VeriFone and Visa International/USA. For more information about ViVOtech, call ext. 107, [email protected] or visit 2

3 Copyright 2004, ViVOtech, Inc. All rights reserved. ViVOtech, Inc. 451 El Camino Real Santa Clara, CA Phone: (408) Written and designed at ViVOtech, Inc. This paper, as well as the software and hardware described in it, is furnished under license and may be used or copied online in accordance with the terms of such license. The content of this paper is furnished for information use only, is subject to change without notice, and should not be construed as a commitment by ViVOtech, Inc. ViVOtech, Inc assumes no responsibility or liability for any errors or inaccuracies that may appear in this document. Except as permitted by such license, no part of this publication may be reproduced or transmitted by electronic, mechanical, recording, or otherwise, or translated into any language form without the express written consent of ViVOtech, Inc. ViVOtech, ViVOwallet, ViVOcard, ViVOpay, ViVOplatform Dynamic Strip, ViVOsmartcable and ViVOgiftcard are trademarks or registered trademarks of ViVOtech, Inc. All other products or name brands are trademarks of their respective holders. April

4 ABOUT VIVOTECH... 2 INTRODUCTION... 5 RF-BASED CONTACTLESS PAYMENT: HOW DOES IT WORK?... 5 THE MASTERCARD PROGRAM... 5 THE AMERICAN EXPRESS PROGRAM... 7 EXXONMOBIL SPEEDPASS... 8 RETAIL APPLICATIONS AND RF-BASED CONTACTLESS TRANSACTION TRADITIONAL CREDIT AND DEBIT CARD PAYMENT LOYALTY PROGRAMS AND PREPAID/GIFT CARDS RETAILER PRIVATE LABEL PAYMENT CARDS CO-BRANDED MULTI-APPLICATION CREDIT CARDS RETAILER IMPLEMENTATION AND BENEFITS OF CONTACTLESS PAYMENT OPPORTUNITIES FOR ACQUIRERS AND ISOS RF-BASED PAYMENT TECHNOLOGIES ISO COMPLIANT RF CONTACTLESS SMART CARD TECHNOLOGY RFID TOKEN-BASED SOLUTIONS SONY FELICA SHORT TERM STRATEGY: LONG TERM STRATEGY: THE NEXT STEP: THE VIVOTECH RF CONTACTLESS PAYMENT SOLUTION VIVOPAY VIVOPLATFORM VIVOGIFTCARD SUMMARY REFERENCES

5 Introduction The newest trend in payment technology is the RF-based contactless payment device. These cards or key fobs allow consumers to quickly and easily pay for transactions with a wave. The RF-based contactless payment devices are easy to use; consumers will like the increased speed and control of transactions, and will increasingly use the devices instead of cash. Retailers are seeing better revenues as consumers spend more per transaction and purchase more frequently. American Express, MasterCard, and Visa have launched initiatives to offer contactless payment devices to their consumers. The financial and retail industries see RF-based contactless payment as a means to increase credit card transactions in traditional cash-only retail segments, provide an improved view of customer buying behavior, and enable new customer-facing programs and services. According to Ed Kountz, a senior analyst at Tower Group, Broadly speaking, the arrival of contactless payments is a matter of when rather than if. In environments where speed and convenience is important, or where handing over cash or a traditional payment instrument is difficult, contactless payments can add demonstrable value. 1 This white paper provides a comprehensive description of RF-based contactless payment including: RF-Based Contactless Payment: How Does It Work? Retail Applications and RF-Based Contactless Transaction Retailer Implementation and Benefits of Contactless Payment Opportunities for Acquirers and ISOs RF-Based Payment Technologies The ViVOtech RF Contactless Payment Solution Figure 1: Contactless Payment Cards and Key Fob PayPass Speedpass ExpressPay RF-Based Contactless Payment: How Does It Work? RF-based contactless payment is straightforward for both the consumer and the retailer. Consumers use a payment card or a key fob that is equipped with a chip and antenna that securely communicates consumer account information via radio frequency to the retailer s payment terminal. The payment terminal then connects to the appropriate financial networks or other back-end processing systems to authorize the transaction. Once authorized, the consumer completes the transaction in a fraction of the time required by cash, traditional credit, or debit transactions that require a card to be swiped through a reader. The MasterCard Program Traditional credit card issuers are expected to distribute contactless payment cards. For example, MasterCard issuers Chase, Citibank, and MBNA have issued RF-based contactless credit cards to existing cardholders as part of the MasterCard PayPass pilot program. In November 2003 MasterCard 1 New Generation of Payments Calls for Proximity, Visa International web site 5

6 International announced that it plans to launch its PayPass contactless payment service as standard feature of its cards in several U.S. cities early in 2004 summer 2. RF-based contactless payment is ideal for retailers where speed of payment is essential, such as QSR (quick serve restaurants), gas stations, convenience stores, grocery stores, theatres, and parking facilities. MasterCard s PayPass is a new implementation of RF-based contactless payment in North America. To accelerate deployment of this new payment method, MasterCard designed PayPass to work with the existing financial infrastructure; requiring minimal retailer investment allows retailers to quickly start accepting PayPass transactions. Consumers and retailers use PayPass as described below: The consumer is issued a MasterCard PayPass contactless credit card that includes both a contactless interface to an oncard chip and a magnetic stripe. Track 1 (T1) and Track 2 (T2) magnetic stripe data (cardholder name, card number, and expiration date) and other security information are stored in the chip. The retailer connects the radio frequency-based reader/writer devices to existing point of sale (POS) terminals or systems. When making a purchase, the consumer waves the PayPass card in close proximity to a specially equipped terminal. The card then communicates T1 and T2 payment account information wirelessly to the terminal via radio frequency, providing all the information needed to complete the transaction and eliminating the need for the cardholder to hand a card to the merchant to swipe. The terminal processes the payment as it would a traditional magnetic stripe credit card transaction, sending the account information and transaction amount to the appropriate acquiring processor for authorization. No changes are required to the retailer or acquirer systems for authorization and settlement. When the transaction is authorized, the consumer receives payment confirmation and completes the transaction. For many low cost retail purchases (e.g., fast food, theater ticket purchases or parking), a signature may not be required, making the checkout process even faster. Figure 2: MasterCard PayPass payment process 2 CardTechnology Magazine News Bulletin: MasterCard Plans Big Contactless Push In 2004 Dec

7 MasterCard PayPass has also been designed to support additional customer-facing POS applications. The PayPass card can include a separate card reference number that enables the card to be used for existing loyalty, prepaid and consumer incentive applications. The implementation also has the potential to allow retailers to work together to provide cross-promotion and loyalty programs to everyday customers. Early results reported from the MasterCard PayPass pilot are extremely positive. 3 In consumer research completed by MasterCard, 63 percent of consumers surveyed have said that they would definitely or probably use MasterCard PayPass if their bank offered it to them and that it would replace cash in more than half (53 percent) of their future transactions. In an employee pilot at MasterCard s headquarters, purchase transaction times were reduced up to 64 percent and the average transaction amount increased by 10 percent (as compared to using cash). A varied selection of retailers are accepting PayPass in an Orlando pilot, including Boater s World, Chevron, City of Orlando Parking, Friendly s, Loew s Universal Cineplex, McDonald s, Ritz and Wolf Camera; additional retailers and QSR are planned. Figure 3: Retailers accepting MasterCard PayPass cards in Orlando, Florida Unlike EMV-based smart card and other RF-based payment implementations, MasterCard PayPass requires no changes to the acquiring and processing infrastructure. Low-cost RF-based terminals can be installed at retailers in minutes, typically without POS software changes. By treating the contactless transactions as magnetic stripe transactions, MasterCard PayPass has simplified the implementation of this promising new payment method, potentially triggering mass issuance and acceptance of contactless payment cards. The American Express Program American Express began pilot programs of their ExpressPay in Phoenix, New York City, and Singapore in The ExpressPay program uses a miniature credit card affixed to a key chain. These key fobs will ultimately do away with card swiping or fumbling for cash. ExpressPay by American Express is the perfect alternative to cash where speed and convenience are crucial to high traffic POS locations such as quick-serve restaurants, drugstores, gas stations, and supermarkets. The ExpressPay pilot in Phoenix includes such retailers as Carl's Jr. Chevron, CVS/pharmacy, Eckerd Drugs, Fry s Electronics, Jamba Juice, Keva Juice, Mail Boxes Etc and Quiznos Sub. 3 New MasterCard PayPass Utilizes Contactless Card Payment Technology, MasterCard press release, December 12,

8 Figure 4: Retailers accepting American Express ExpressPay in Phoenix, Arizona Over 400 nationally known chains accept ExpressPay at this time and more than 15,000 key fobs have already been issued. ExpressPay by American Express uses an American Express card number or a prepaid account similar to SpeedPass and standard gift cards. ExpressPay is linked to an existing credit or debit card. The account number is stored on the key fob and transmitted to the RF reader when making a contactless payment. To make a purchase, customers simply hold the key fob in close proximity to the payment terminal. Payment is authorized quickly and a signature is not required for transactions under $50. When customers sign up for ExpressPay, they will select the specific account funds are to be drawn from and have two options: 1. ExpressPay Direct Link Allows a daily spending limit of $150 and is linked to an American Express or other charge card for funding. Customers will see their charges on their monthly statements. 2. ExpressPay Pre-Loaded A prepaid amount of up to $600 monthly can be drawn from any debit or credit card. This option can also be set up to replenish funds automatically once the account value drops below $20. ExpressPay utilizes an RF payment system that conforms to ISO/IEC This system communicates applicable account information and processes the transaction accordingly. The terminal can easily be integrated into the merchant s existing POS system. The complete program will contain variations of standard credit or debit card programs and will be available for everyday, everywhere use soon. Field studies have indicated that while the majority of users prefer the convenience of key fobs, many will continue to carry full size credit cards. American Express studies show consumer spending surged 20 to 30 percent when using key fobs rather than traditional cash transactions. Customer checkout time was decreased by 30 to 40 percent. Additional survey results: Customers like the convenience of key fobs Customers are likely to use ExpressPay on a daily basis Universality is key to accepting the various payment methods Cost associated with setup and implementation is easily recovered by added-value transactions. ExxonMobil Speedpass Started in 1997 in Boston based, Mobil-branded service stations, Speedpass allow customers to make purchases fast, simply, and conveniently. By linking to a customer's credit or check card, Speedpass eliminates the need to search through purses or wallets to find cash or credit cards. 8

9 Today, more than six million people in the U.S. have a Speedpass device. Speedpass has been installed in over 8,500 Exxon- and Mobil-branded service stations and convenience stores in the U.S. More than 90 percent of Speedpass users report they are highly satisfied. Speedpass uses a radio frequency system located at the pump or register to communicate with the miniature transponder located in a key fob, watch, or transponder affixed to the Speedpass vehicle's rear window. Each device has a unique identification and security code that is transmitted to the reader when a purchase is made. The purchase is automatically charged via the payment method setup in the Speedpass device. The customer s credit or check card number (or checking account number) and personal information are never stored in the Speedpass device and remain outside the Speedpass signal system, maintaining the confidentiality of that information. Speedpass is currently in use at several retailer locations such as grocery stores, convenience stores, and quick-service restaurants. Selected Stop & Shop supermarkets began using Speedpass in 2002 for payment, coupons, and loyalty programs. Over the past three years, more than 430 McDonald's locations in the Chicago area have begun accepting Speedpass. In December 2002, ExxonMobil Speedpass and Timex introduced products incorporating the Speedpass transponder into various versions of Timex watches. The watches look and function like regular watches, with the added feature of allowing customers to pay at locations accepting Speedpass. 4 4 See Speedpass Web site, 9

10 Retail Applications and RF-Based Contactless Transaction RF-based contactless transactions can add value for a number of retail applications including: Traditional credit and debit card payment Loyalty programs and prepaid gift cards Retailer private label credit cards Multi-application, co-branded credit cards Traditional Credit and Debit Card Payment Most of the focus in initial contactless payment pilots has been on using RF-based payment cards or key fobs to replace traditional magnetic stripe credit and debit cards. This application has tremendous potential for retail segments where transaction speed is essential and where cash replacement is desirable e.g., QSR, convenience stores, gas stations, theatres, grocery stores and parking facilities. In worldwide contactless payment implementations, consumers have responded favorably to the new payment cards and processes. They value the increased convenience and speed of transactions with RFbased contactless payment, eliminating the need to fumble for cash or to hand over a card for payment. Even more interesting, consumers like paying with contactless cards. MasterCard s consumer feedback indicated that PayPass was perceived to be fun to use and to make shopping less of a hassle. 5 American Express has also reported that focus group research shows that consumers like the new payment device and are excited about how easy it is to use. 6 With such strong, positive consumer reaction, retailers who adopt RF-based contactless payment can expect a high degree of customer satisfaction with the new payment process. Contactless payment provides the following tangible retailer benefits: Replacement of cash transactions Faster transaction processing Increased size and frequency of transactions US Consumer Payment Systems Improved access to customer data Market Share: Transactions 4 Improved transaction security Other Checks Replacement of cash. Cash made up over 43 percent of the billion consumer payment transactions in the 5.3% 24.4% United States in By replacing cash, retailers can Cash speed transaction processing and reduce cash handling 43.5% Cards costs and losses from pilferage. Contactless payment 26.8% implementations are designed to allow consumers to pay with an RF-based credit card more easily than with cash. For example, the top 50 U.S. QSR chains were expected to generate more than $87 billion in sales through 100,000 locations in However, only a fraction of U.S. fast food restaurants accepted credit cards fewer than 15 percent of restaurants visited in a recent Visa market study. 9 McDonald s has now taken the 5 Ibid. 6 Amex Tests Wave- N-Go Payment, Card Technology, March 6, Consumer Payment Systems, The Nilson Report, Issue #777, December Fred P. Gore, Payment Cards Represent an Increasingly Popular Choice on the QSR Menu, Transaction World, December Visa Payment Card Acceptance Helps the Bottom Line of Quick Service Restaurant Partners, Visa press release, November 11,

11 lead in accepting credit and debit cards and is also testing RF-based contactless payment systems at a number of locations throughout the U.S. Conversion of fast food customers to RF-based contactless payment offers tremendous value to the retailer by eliminating cash handling and saving time. Faster transaction processing. RF-based contactless payment speeds transaction time at checkout. Consumers are not required to extract cash or cards for purchases and retailers are not required to give change or swipe a card. Transaction time is even further reduced in certain retail segments where card associations no longer require signatures if transactions are below certain limits (e.g., QSR, movie theaters, parking lots). This results in increased profits as retailers can more efficiently handle a larger number of customers, vital consideration during peak periods. Increased size and frequency of transactions. Studies and early implementations of contactless payment have shown that consumers spend more if they are not required to use cash and that they frequent retailers who offer convenience and quick checkout with less hassle. Numerous implementations have reported increases of up to 30 percent in sales for retailers accepting RF-based contactless payment. 10 Improved access to customer data. Cash sales are anonymous, providing retailers with no information about their cash customers. Using RF-based contactless payment, retailers can collect data about customer buying habits and preferences. By making the cash customer purchases visible, retailers can better understand customer behavior and implement targeted promotions to further increase sales and customer loyalty. Improved transaction security. Contactless smart cards provide a highly secure payment solution. Consumer account information is stored securely on the chip and the cards themselves are tamper-resistant and extremely difficult to duplicate. A payment transaction initiated by the contactless smart card s built-in chip is be considered much more secure than one initiated with a magnetic stripe card. The major international card associations -- MasterCard, Visa, and American Express -- have launched initiatives and project rollouts offering RF-based contactless payment devices. All of the implementations have been based on technology complying with the ISO standard. This strong financial industry support, coupled with the favorable consumer reaction and strong retailer benefits demonstrated in early implementations, is expected to motivate issuers to offer new RF-based payment cards. 10 Contactless Payment and the Retail Point of Sale: Applications, Technologies and Transaction Models, Smart Card Alliance white paper, March

12 Loyalty Programs and Prepaid/Gift Cards Retail transactions include more than just payments loyalty programs and prepaid/gift cards deliver significant value to retailers. Virtually every retail segment has implemented loyalty programs, studies show that 50 to 83 percent of Americans participate in at least one. 15 Retailers have found that loyalty programs work. Consumers will shop preferentially at stores offering attractive loyalty benefits. Loyalty programs also allow retailers to collect better information on customer behavior (e.g., when they visit, what they buy) so that they can identify their best customers, implement targeted promotions to encourage repeat or incremental purchases, and improve the customer s purchase experience. Results from Contactless Payment Implementations Trials [of RF payment] in so-called quick-service restaurants have resulted in a 15 to 30 percent bag lift the industry jargon for an increase in the average order cost, according to Ed Kountz, senior analyst with Tower Group. 11 Purchase transaction times were reduced up to 64 percent and the average transaction amount increased by 10 percent (as compared to using cash) in MasterCard s PayPass employee pilot in Purchase, NY. Contactless payment can decrease drive-through transaction time by 90 seconds, according to Sue Gordon-Lathrop, Visa International. 12 A recent Visa study showed a 20 to 30 percent increase in the average transaction value for credit cards at quick service restaurants. 13 According to David Bonalle at American Express, focus groups show consumers like contactless payment and get excited about how easy it is to use. 14 Sales of prepaid cards totaled $36 to $38 billion in 2002, according to Bain & Co. 16 American Express, Visa, MasterCard and retailers issue prepaid cards. These cards are sold as gift cards or as reusable stored-value cards that allow consumers to quickly and easily pay for purchases. Prepaid cards deliver a number of clear benefits to retailers, including: Increased sales of cards that drive traffic to retailers stores. Income from investment of prepaid card purchases while they are not being used. Revenue from unused prepaid card balances. (According to Synergistics Research, 3 in 10 consumers do not use the full value of the prepaid card. 17 ) Faster payment and shorter queues. The prepaid card serves as a cash substitute that can speed payment at high traffic retailers. Increased revenue and loyalty. For example, a ValueLink survey reported that 61 percent of gift card recipients spend more than the initial prepaid amount. 18 More efficient and profitable gift certificate programs. Gift cards eliminate the need to process paper-based gift certificates and allow tracking of gift certificate activity. Since balances are 11 Matthew Miller, Received Wisdom, CommVerge, November 1, Visa, MasterCard diverge on proximity payments, European Card Review, August Visa Payment Card Acceptance Helps the Bottom Line of Quick Service Restaurant Partners, Visa press release, November 11, Amex Tests Wave- N-Go Payment, Card Technology, March 6, Patrick LaPointe, The Future of Loyalty Marketing, TRENDtalk, Frequency Marketing, Inc., March Michelle Higgins, Short on Gift Ideas? Think Plastic, Wall Street Journal, November 13, Ibid. 18 Survey Shows Consumers Buying More, Spending More on Gift Cards for Friends, Relatives and Themselves, ValueLink press release, October 29,

13 maintained within the gift card system, gift cards also eliminate the need to provide the customer with cash if a purchase is less that the gift card/certificate amount. Increased Sales Plastic vs. Paper. Experience has shown that plastic gift card sales increase an average of 35 percent over current paper certificate programs. 19 While both prepaid and loyalty cards have been implemented most often with magnetic stripe cards, RFbased contactless smart cards offer significant benefits to retailers and increased convenience to consumers. Transaction time is further reduced. Consumers wave their card at the POS terminal without needing to hand it to the retailer to swipe. Since loyalty information or card value can be stored on the card itself, online access to a central database is not required. This allows information to be available at all retail locations and enables instant reward redemption at the POS. Multiple loyalty programs or multiple retailer prepaid/gift programs can be implemented on a single card, improving consumer convenience. According to a Forrester consumer survey, over 30 percent of consumers wish they could use a single frequent shopper card at many locations. 20 A multi-retailer loyalty card also offers opportunities to mall operators and/or other merchant coalitions that collaborate on cross-promotions. A combined prepaid/gift card and loyalty card can be issued. This provides increased information on customer purchasing behavior and the mechanism for retailers to offer other promotions to customers that they know. Transaction security is improved. With data securely stored in the contactless card which is securely transmitted from the card to the terminal, RF-based smart cards are extremely difficult to counterfeit and include features that make them resistant to tampering reducing the potential for loyalty or prepaid card fraud. By taking advantage of RF-based contactless technology, retailers can implement more effective programs that increase revenue, improve customer loyalty, and gain better information on consumer behavior. Loyalty program and gift card service providers can also offer new value-added services, capitalizing on the inherent advantages of having a more capable payment card system that is also more convenient to use. Retailer Private Label Payment Cards While private label card usage is declining, over 600 million private label cards were in circulation in Approximately 35 percent of cards issued are private label cards. 22 These cards are attractive to retailers since studies have shown that they help to build customer loyalty, with private label cardholders visiting stores twice as often and spending 2.5 times more per year than non-cardholders. 23 Private label cards can be integrated with RF-based contactless smart card technology and offer benefits above and beyond traditional bankcards. Retailers and private label card issuers can easily couple payment and other value-added applications on a single card, increasing consumer convenience and allowing the retailer to implement multiple customer relationship-enhancing functions. For example, retailer s loyalty program, prepaid gift card, and electronic coupons or discounts can be combined on a single card. By increasing the value of the private label card to the consumer, retailers can increase usage of their card, gain access to information about customer buying behavior, and use the card to implement programs that solidify relationships with their best customers. 19 Source: Gift Card USA 20 James Crawford, Identity: The Changing Relationship between Consumers and Retailers, presentation at Smart Card Alliance Mid-Winter Conference, Forrester Research, February 13, Kelly Hlavinka, Fostering a Renaissance in Private-label Loyalty, CREDITtalk, Frequency Marketing, Inc., August James Crawford, op. cit. 23 Alliance Data Systems web site, 13

14 Co-branded Multi-Application Credit Cards While private label cards are still in use, the market trend is for retailers to offer a co-branded credit card with a card association. By partnering with MasterCard or Visa, retailers can continue to develop consumer brand loyalty and increase in-store spending, while also capturing a fraction of cardholder spending outside of their stores. The co-branded Sears MasterCard is a good example. Kevin T. Keleghan, Sears president of credit services said "The company was surprised when customers who received Sears' MasterCards in the mail began coming back unbidden to the stores. In-store spending by the 10 million or so light card users who received new MasterCards surged 35 percent. Mr. Keleghan said that when Sears can entice inactive cardholders to transfer balances to Sears' MasterCards, in-store spending spikes, with 25 percent of those cardholders making purchases at Sears. 24 As with private label cards and traditional credit cards, RF-based contactless smart cards can increase cardholder convenience and usage of the co-branded card and can support the implementation of multiple applications. Using the secure on-card chip, retailers and issuers can offer payment, loyalty, and prepaid programs on a single card. RF-based contactless smart cards can also support multi-retailer loyalty and promotion programs (as with MasterCard PayPass) for example, allowing cross-selling and standard loyalty programs among complimentary retailers. By integrating applications through a common infrastructure, retailers and issuers can leverage investment across applications and across retailer participants. Retailer Implementation and Benefits of Contactless Payment For a new payment technology to be successful in the market, retailers must implement the infrastructure required to accept and process payment. For payment technologies such as EMV contact smart cards, the investment required by retailers and payment processors is significant and market deployment is slow, while the infrastructure is upgraded over time. Retailers can quickly and easily implement contactless payment and start accepting contactless payment cards and key fobs that are being issued by card associations. This is facilitated by the payment approach being implemented and by the products being offered that allow retailers to adapt existing POS systems to accept contactless payment cards. The current US pilot implementations of contactless payment store T1 and T2 magnetic stripe data in the contactless card. The card then communicates T1 and T2 payment account information to the terminal via radio frequency. The retailer and the acquiring processor see no change in the payment data (as compared to a magnetic stripe transaction) and do not need to make any changes to POS systems or processing infrastructure. Vendors are offering RF-based terminals that can be installed quickly and easily with existing POS systems. With solutions available that permits retailers to upgrade POS systems while also retaining existing functionality, contactless payment acceptance is straightforward and inexpensive for retailers to implement. For example, the ViVOtech ViVOpay terminal has Dynamic Strip interface technology that is being used by MasterCard and American Express. The ViVOpay Dynamic Strip is a simple self-adhesive insert that can be installed in a POS terminal s magnetic stripe slot. The data from the ViVOpay RF reader is transmitted through this insert, simulating a magnetic card swipe, with no software changes required. With the dynamic strip installed, card holders can continue to swipe traditional magnetic without effecting operations. The January 2003 issue of The Nilson Report profiled the ViVOpay terminal and called it a U.S. smart card breakthrough that could trigger mass issuance of contactless smart cards Lavonne Kuykendall, A Catalog of Reasons for Sears Card Profits, The American Banker, March 14, U.S. Smart Card Breakthrough, The Nilson Report, Number 780, January

15 By basing contactless payment on the magnetic stripe payment infrastructure, major card associations have launched programs that have the potential to drive rapid acceptance of contactless payment cards by retailers similar to the rapid growth seen by gift card programs that used the existing infrastructure. This approach and the innovative products being offered by terminal vendors allow retailers to realize the significant benefits of accepting contactless payment cards, with minimal investment. Table 1: Retail Applications and Contactless Payment Benefits New Retail Applications Traditional credit and debit card payment Loyalty and prepaid/gift cards Private label payment cards Co-branded multi-application cards Multi- Retailer Coalition Cards Instant Consumer Incentives Opportunities for Acquirers and ISOs Contactless Payment Card Benefits Replacement of cash Faster transactions Increased revenue Improved access to customer data Multiple applications on a single card (payment, loyalty, prepaid/gift card, promotion programs) Multiple retailer programs on a single card Improved transaction security According to James Crawford of Forrester Research, retailers spend almost 30 percent of IT capital budgets in stores 26 and are poised for an explosion of customer-facing technology. 27 The emergence of RF-based contactless payment technology provides acquirers and Independent Sales Organizations ( ISOs) with the opportunity to differentiate product and service offerings, gain additional revenue, and help their retailer customers take advantage of the benefits of RF-based contactless payment. Increased revenue. Early market results show that retailers can easily start accepting MasterCard PayPass contactless payment cards and ExpressPay by American Express. By offering low-cost terminal adapters and helping retailers with the straightforward POS installation, acquirers and ISOs can quickly increase revenue from equipment sales and monthly leases/rentals and gain share in this emerging market. Increased transaction volume. Acquirers and ISOs will see an increase in card usage by consumers with contactless payment cards. The almost immediate increase in transaction volume that retailers have seen when implementing RF-based contactless payment translates directly into increased transaction revenue for acquiring processors. Improved penetration of traditional cash-only retail segments. By offering RF-based contactless payment solutions, acquirers and ISOs can better serve traditional cash-only retail segments that need fast transaction processing. By upgrading payment systems at QSR, parking facilities, movie theatres and other retailers to accept RF-based contactless payment, acquirers and ISOs can increase transaction volume (converting cash to credit transactions) and gain additional revenue from equipment purchases. New value-added service portfolio. RF-based contactless transactions are not limited to payments. The emergence of this new technology provides opportunities for acquirers and ISOs to add new services to their portfolio that can differentiate their offerings with retailers. Offering outsourced loyalty, prepaid card or electronic coupon services can help acquirers and ISOs develop new sources of revenues. Better return on existing POS investment. Acquirers and ISOs will be able to enjoy an extension in the lifetime of their existing POS terminal installed base providing revenue over a longer period of time. 26 James Crawford, Building Smarter Stores, Forrester Research, August James Crawford, Identity: The Changing Relationship between Consumers and Retailers, op. cit. 15

16 Acquirers and ISOs can quickly and easily capitalize on this new market opportunity by offering retailers a straightforward upgrade to their POS equipment to accept RF-based contactless payment devices. RF-Based Payment Technologies A number of technologies can be used to implement contactless payment systems, with three key RF-based technologies: 1. ISO compliant RF contactless smart card technology 2. RFID token-based solutions 3. Sony FeliCa smart card technology ISO Compliant RF Contactless Smart Card Technology Standards are important for the adoption of technology as they provide the ability to have multiple sources of products base on the same standard. The ISO has standardized the technologies used in contactless smart cards. Contactless smart cards compliant with the ISO international standard for contactless cards are used in numerous payment applications, with over 200 million cards in use worldwide. 28 Contactless payment cards based on ISO communicate with readers at MHz and have an operational range of up to 10 centimeters (approximately 4 inches). 29 The ISO standard provides an option for two different types of signaling schemes: Both signaling schemes offer half duplex communication with a 106 Kbit per second data rate in each direction and use a sub-carrier modulation frequency of KHz to transmit data. An ISO card is powered by the RF field and does not require its own battery. Applications based on ISO A/B are highly secure when compared to those using magnetic stripe cards and other RF-based technologies. Counterfeit cards are extremely difficult to manufacture and the cards themselves are tamper-resistant. Built in security features on the contactless card allow the encryption of data on the card during communication with the POS terminal and prevent the replay of transactions. Contactless smart cards now achieve the same degree of security as contact smart cards. All of the major card associations are endorsing the ISO standard, with RF-based contactless payment initiatives using the technology. MasterCard PayPass uses ISO Types A and B to communicate T1 and T2 magnetic stripe credit card data from the PayPass card to the specially-equipped retailer POS terminal. Retailers can easily add a compatible RF-based terminal to existing POS systems. No software changes will be required. Visa International has developed a new global payment specification for contactless payment based on ISO Its first use is expected in pilot programs in South Korea. 30 American Express is currently testing a new ExpressPay contactless payment device that is based on ISO Type B. 31 RFID Token-Based Solutions RFID token-based solutions are typically used in closed payment systems. Applications in North America include automated toll collection and payment services for gas stations and convenience stores (e.g., Exxon Mobil Speedpass). In an RFID token-based system, a unique ID is stored on the RF-based consumer key fob. This ID is transmitted via RF (either low-frequency or high-frequency) to the receiver where it is sent to a central processing system. The central processing system then links the consumer ID to a payment 28 Smart Card Alliance, op.cit. 29 Operational range is the maximum distance between the proximity card and reader for reading and writing data from/to the card. 30 Visa Develops Global Payment Specification for Contactless Smart Cards, Visa press release, September 19, Amex Tests Wave- N-Go Payment, Card Technology, March 6,

17 account and payment is completed (either through a pre-funded account or through standard credit card processing). RFID token-based systems can operate at longer ranges 0.2 to 10 meters (approximately 0.75 to 33 feet) depending on the frequency increasing their attractiveness for certain contactless payment applications (e.g., toll collection). To date, they have not received any support from the financial industry since they are perceived to have security risks and are based on proprietary technology with no global standard. Systems that use RFID tokens may require a separate processing infrastructure with retailers incurring additional costs for processing transactions. Sony FeliCa Over 35 million Sony FeliCa contactless smart cards have been issued worldwide, including large-scale implementations in Hong Kong, Singapore and Japan. 32 Sony FeliCa technology is used throughout Asia Pacific for transit, electronic purse and loyalty applications. The proprietary Sony FeliCa cards use MHz to communicate with readers. Sony FeliCa technology has similar technical specifications to ISO A/B, but is not compliant with the standard. JCB has recently announced a contactless smart card that incorporates both Sony FeliCa contactless and EMV contact technology and that will be used for JCB employees as an ID and payment card. 33 Sony is also working with Visa and Infineon to develop a common chip supporting ISO A/B and FeliCa technology. Table 2 summarizes the implementation status of the three RF-based contactless technologies for payment systems. Given the significant advantages that RF-based smart cards have, it is expected that most largescale contactless payment implementations will be based on ISO and Sony FeliCa smart card technology. Table 2: RF-Based Contactless Payment Technologies Technology ISO A/B RFID tokenbased solutions Sony FeliCa Implementation Status 1. Wide card deployment worldwide, with over 200 million in use through pilot implementations and production rollouts in the U.S. 2. Strong financial industry support from all major card associations American Express, JCB, MasterCard, Visa 3. Standards-based, with strongest security 4. Contactless payment implementations have used the existing payments infrastructure, requiring less retailer and acquirer investment Good market presence in the US, with RFID tokens used for toll collection and payment at gas stations Proprietary technology, with single source availability of cards and reader technology and weaker security No financial industry support and implementations have used new processing infrastructures, requiring higher retailer investment. Wide card deployment in Asia Pacific, with over 35 million cards in use Used by JCB in payment applications in Asia Pacific Strong security, but proprietary technology 32 Visa, Sony and Infineon Form Strategic Alliance for Smart Cards, press release, March 11, JCB Readies New Smart Card, TechWeb, March 7,

18 POS Solution Options: Vendors are offering contactless RF terminals that can quickly and easily be installed with existing POS systems. In the near future, POS terminal vendors are also expected to release new POS terminals with physically integrated contactless readers especially for the consumer-operated payment terminal market. There are three approaches that can be used to interface the contactless RF terminal with existing POS systems: Serial Cable Interface: This is the long-term recommended solution. It provides a bi-directional communication interface between a POS system and a contactless RF card reader. This approach requires a change in the POS system software to communicate with the reader through its serial port. The serial interface with the POS software change also allows the POS system to recognize that the financial T1 and T2 data is coming from a contactless payment device rather than from a magnetic stripe card. Smart Cable Interface: This is a wedge cable that connects either to a PS/2 port or to a serial communication port. It is unidirectional cable and works with many of existing POS ECR systems that have PS/2 port available. It does not require software changes as many of the POS systems expect to receive T1 and T2 data through their PS/2 port. Magnetic Stripe Adapter: This is the quick and easy solution to get started accepting contactless payment at any POS system that has a magnetic card swipe reader on it. This solution includes a simple insert that is installed in a POS terminal s magnetic stripe slot in just few minutes. The data from the contactless RF terminal is transmitted through this insert, simulating a magnetic card swipe, with no software changes required. This solution allows retailers to easily upgrade POS systems while also retaining existing functionality; contactless payment acceptance is straightforward and inexpensive for retailers to implement 34. Retailers can start with a Magnetic Stripe Adapter solution and when POS software is upgraded, they can replace the adapters with a serial or integrated solution. Table 3: Contactless Reader Interface Technologies Technology Pro s Con s Serial Interface Smart Cable Interface Magnetic Stripe Adder or Dynamic Strip Technology Long Term Recommended Solution Reliable and easy to maintain Provides Bi-Directional Communications interface Make Data Element changes required by some card associations Short and long term solution. Reliable Easy to maintain Quick and simple short term solution Software change not required to get started Retailer locations can be enabled in few hours Allows testing the market with a minimal investment Requires Extra Serial Port on existing POS Additional time to market in order to make software changes on the POS application Requires field upgrade and possible recertification Cannot tell if the data is coming from a magnetic stripe reader or from a contactless RF card/fob reader. Could have higher maintenance issues or require more frequent servicing Does not identify if the T1 and T2 data is coming from a contactless card as required by some card associations. 34 U.S. Smart Card Breakthrough, The Nilson Report, Number 780, January

19 Short Term and Long Term Roll Out Strategy: MasterCard International and American Express are targeting their contactless chip (card/fob) payment programs, PayPass and ExpressPay respectively for: High traffic retailers (quick service restaurants, convenience stores) Unattended POS locations (gas pumps, vending machines) Transit applications These are the market segments where the targeted retailers, ISOs, acquirers, and card issuers will see clear business benefits. At the same time, consumers benefit by having a convenient, easier way to pay and enjoy better loyalty benefits from participating merchants. In 2004, American Express and MasterCard International will be investing resources in rolling out contactless card/fob payment into key geographic markets. MasterCard has stated that they will have true consumer deployments starting in the summer of 2004, with 4 to 6 million MasterCard PayPass cards expected to be in circulation by the end of the year. 35 American Express ExpressPay - Phoenix MasterCard Intl PayPass - Dallas, Orlando, and Manhattan Short Term Strategy: Retailers, ISOs, and Acquirers doing business in the American Express and MasterCard pilot geographies and associated with targeted vertical businesses can proactively participate in the roll out of both ExpressPay and PayPass programs. The advantage of starting now will be to leverage the resources that both MasterCard and American Express are putting in to make contactless payment a success in their respective target cities, while gaining a competitive advantage in these cities. The only way to achieve such success is through realizing critical mass. Enough merchants are required to be set up to accept contactless card/fob payments and enough PayPass cards and ExpressPay key fobs issued so that merchants start seeing contactless transactions everyday. Both organizations plan to expand the roll out of their contactless payment programs to other cities in the U. S. soon. Long Term Strategy: While participating in initial roll out in targeted cities, retailers, ISOs, and acquirers can determine whether it makes sense to expand contactless payment support to other retail location in other cities and, eventually, nationwide. Initial market data shows that retailers from the primary target industries (e.g., QSR) should see increased revenue, increased efficiency that contributes further to their bottom lines, and enhanced customer loyalty. The Next Step: The next logical step is to connect with the card associations who are currently driving the contactless card/fob payment programs in the U.S. to get the latest information on their programs, contacts, target cities, and status. For MasterCard Paypass please visit ExpressPay by AMEX visit 35 The Rush To Contactless Payments, Card Technology, Cover Story, January, 2004 Issue 19

20 The ViVOtech RF Contactless Payment Solution ViVOpay ViVOpay is a unique contactless payment solution, enables more than 30 million existing POS systems with rapid and cost-effective deployment of RFbased contactless card payment capabilities. Rather than requiring retailers to purchase new systems, ViVOpay enables an easy and cost-efficient upgrade of previously installed magnetic stripe POS terminals to accept payment from contactless payment cards. Consumers move quickly through checkout lines and wave their RF-based contactless payment card near the ViVOpay terminal. The ViVOpay terminal adapter accepts the contactless card information and transmits it to the retailer s installed POS system. A unique solution with short time to ViVOtech uses patent-pending, plug-and-play Dynamic Strip technology. The ViVOpay Dynamic Strip is a simple insert installed in a POS terminal s magnetic stripe slot. The data from the ViVOpay RF reader is transmitted to the existing payment terminal through this insert, simulating a magnetic card swipe. The Dynamic Strip can be installed in minutes and contactless payment card data accepted with no required software changes. The ViVOtech solution provides retailers with an easy upgrade to existing POS systems without requiring additional capital expenditures for new POS hardware and software, transaction processing software, or payment networks. ViVOpay can be installed easily with any POS system that accepts magnetic stripe cards without costly changes. ViVOpay is compatible with most POS systems used by retailers large and small (e.g., VeriFone, Hypercom and integrated ECR) and provides a powerful contactless payment solution without requiring hardware replacement and POS or back office software upgrades. Retail personnel can easily install the ViVOpay terminal to make legacy systems capable of contactless-payments. The ViVOpay terminal enables the acceptance of RF-based contactless credit, debit and pre-paid cards, while retaining the terminal s existing functionality. The ViVOpay RF reader can also be connected through a serial port of an existing POS terminal or system. An acquirer or ISO could make their contactless payment solution available to the market in a very short time using the Dynamic Strip technology and later connect the ViVOPay terminal through the serial port when the existing POS system is ready for a software upgrade. ViVOtech has implemented a Smart Cable technology, similar to the wedge design, which will connect between a PS2 port on the point of sale system and the ViVOpay reader. In this configuration, there is no need for additional ports on the POS system because the external keyboard or magnetic stripe reader plugs directly into the SmartCable. A built-in long-term solution option ViVOpay s flexible design is crafted to fit any sales counter or store layout. Retailers can place ViVOpay s customer-friendly reader module at the existing checkout without moving current POS systems. ViVOpay is designed to accept RF and infrared proximity payment technologies using the same system. In addition to RF-based contactless cards, consumers can make payments by pointing or clicking their cell phones or PDAs. ViVOtech applications make retail operations more efficient and greatly improve the reach and capabilities of retailer loyalty programs. ViVOpay benefits to retailers include: Faster checkout. Consumers can wave their RF contactless credit cards close to the ViVOpay terminal and complete their transactions in a fraction of the time needed for cash or magnetic stripe credit cards. 20

21 Highly secure transactions. ViVOpay supports ISO Types A and B contactless smart cards that carry the appropriate financial card application. All financial data is encrypted during all steps of the transaction. For infrared-based contactless payment, ViVOpay uses the secure payment protocol based on IrFM (Infrared Financial Messaging) from Visa contactless payment specifications. Fast and easy installation. Merchants can install ViVOpay easily and within minutes, with no change to existing POS systems. ViVOpay is universally compatible with most major POS terminals and most gasoline pumps and vending machines. Existing POS functionality is unaffected. Loyalty program capable. ViVOpay is able to communicate with the consumer s RF contactless card. By connecting ViVOpay directly to ECR systems and POS terminals through a serial port, retailers can support two-way communication with the consumer s card, implementing loyalty program applications, electronic promotions and coupons, and digital receipts. Customer-friendly design. ViVOpay is equipped with LEDs and audible tones to capture the customer s attention in a noisy retail environment and provide for an interactive and self-explanatory payment process. Its flexible design allows for placement close to where consumers stand, regardless of POS terminal location. Low cost. The ViVOpay terminal adapter is just a fraction of the cost of a new POS terminal, enabling retailers to quickly and cost-effectively accept payment from new RF-based contactless payment cards. Immediate availability. The ViVOpay terminal is available now and is currently being installed and used at multiple retailers. ViVOtech delivers acquiring banks and ISOs an affordable, scalable, and easy to use contactless payment solution that increases card acceptance at traditional cash-only retailers and provides benefits to any retailer who wants Current ViVOpay Adapter Availability VeriFone Tranz 330, 380x2, 380 Omni 390/395/396/490 Omni 3200, 3350, 3740, 3750 Everest, Everest Plus Quartet Ruby, Pearl Hypercom ICE 5000/5500/5600 ICE 6000/6500 T7P, T7Plus T77 Ingenico CM2001, Elite 510 Entouch1000 Flash 400 to improve their customer s checkout process. Unlike previous attempts to reinvent the POS system for new payment devices, ViVOtech s payment solution leverages the existing magnetic stripe infrastructure at retailer locations. ViVOpay is extremely cost-effective and provides almost instantaneous return to both retailers and acquirers. Vertical Markets: ViVOpay is also produced in different versions for the different needs of specific vertical markets: IBM SurePOS 500/600 Wayne-Dresser Wayne WaynePlus Nucleus MICROS Ultra/Workstation Eclipse Lipman Nurit 2080/2085/3020 ViVOpay Dine: Brings contactless payments directly to the consumer's table. ViVOpay Dine is a portable contactless reader terminal that restaurants worldwide can use to accept contactless credit and debit cards as well as mobile phone payments directly at the customer's table. ViVOpay DT Drive-Thru: Makes contactless credit, debit and gift card payments possible at the Drive-Thru lane with the same easiness of that the ViVOpay countertop units do inside the store. 21

22 ViVOpay OEM: ViVOpay OEM boards are easily integrated into existing POS systems such as fuel dispensers, vending machines, kiosks, time and attendance terminals, and transportation ticket machines. ViVOpay iclass: ViVOpay iclass is a POS terminal adapter that enables the next-generation of HID MHz read/write contactless smart cards to exchange payment and loyalty information with current cash register systems in and around campus. ViVOplatform The ViVOplatform allows retailers to manage the contactless gift cards and loyalty programs. The ViVOplatform has a database-mapping engine that will connect to legacy POS systems. The ViVOplatform also has a communication module that allows consumers to load value, buy gift cards, and view loyalty information all from a secure Internet session. The contactless prepaid system allows for: Issuing prepaid contactless cards/key fobs at the POS Buying contactless cards/key fobs over a secure internet session Reloading Value at the POS or over a secure internet session Online account management including transaction history and multiple retailer card associations Detailed management reports and administration tools for the retailers The contactless loyalty programs can offer a variety of business rules such as: - Dollar based or point based system - Item or frequency based The loyalty system can be tailored for each retailer to meet existing programs or for creating new programs. The loyalty system can offer instantaneous rewards or accumulate rewards that are redeemable at the POS location, online, or by phone/mail. Cross selling and a coupon-based scheme can be designed to reward customers when a preset frequency or point total is reached. ViVOgiftcard ViVOgiftcard works in conjunction with the ViVOplatform and ViVOpay for private merchant gift card applications. Contactless gift cards can increase consumer use of gift cards, by making payments quicker, easier, and more secure than cash. With the ViVOgiftcard solution, gift card devices can have custom and innovative form factors such as cards, key fobs, mobile phones, hamburgers, and other custom designs, better expressing a company's brand and helping merchants win the "wallet share" war by offering their customers real ease of use. ViVOgiftcard contactless technology also provides added security, reduces wear and tear of customer cards, and can be easily reloaded with cash online or at any ViVOgiftcard-enabled store. Customers carry their ViVOgiftcards on key chains in their pockets or attached to their mobile phones and simply wave their cards to make quick payments at merchants, saving precious seconds in every transaction. The highly differentiated ViVOgiftcard is designed to boost the adoption rate and use of gift cards by a merchant's customers, expanding the benefits of gift card programs: increased prepaid revenue, higher transaction amount per visit, fraud protection, and easier processing. 22

23 The ViVOgiftcard solution includes the ViVOplatform server software application, the ViVOpay appliance, and the contactless gift card device. Summary ViVOtech offers a variety of products to make the contactless payment process quick and easy. First, the ViVOpay reader communicates to the contactless card and key fobs. A serial cable, Smart Cable or Dynamic strip for interfacing with the POS system is also available. As a complementary product to the payment network, ViVOtech offers the ViVOgiftcard solution for private merchant loyalty and prepaid applications. The cards can piggyback on MasterCard and American Express equipment so that retailers could accept the ExpressPay and Paypass programs while implementing their own contactless gift card programs. Finally, ViVOtech offers the ViVOplatform, which manages the contactless accounts and allows for a secure consumer interface using the Internet. Consumers can buy contactless cards, add value to a prepaid account, and accumulate loyalty points. Figure 5: Network Diagram Card Associations Secure Internet Interface Purchase Cards On-Line View Loyalty Points View Transaction Records Manage Stored Value Loyalty and Prepaid Transactions Issuing Banks Credit and Debit Transactions Web Server ViVOplatform Loyalty Instant Bank Processor Merchant Database POS System ViVOpay 3000 Readers Table 4 summarizes the exciting benefits of RF-based contactless payment and ViVOtech s solution for consumers, retailers, acquirers and issuers. 23

24 Table 4 ViVOtech RF-Based Contactless Payment Solution Benefits Consumers Retailers Acquirers Issuers Convenience Faster payment Shorter checkout lines Less need for cash Conclusion Replacement of cash Faster transaction processing ability to handle a higher volume of customers Increased revenue from increased transaction size and more frequent transactions Fewer checkout lanes Better access to customer data and improved knowledge of customer buying behaviors Low investment to accept RFbased contactless payments, with straightforward upgrade of existing POS terminals Improved transaction security Ability to implement payment, loyalty, prepaid/gift and other applications on a single card Ability to participate in multiretailer loyalty and crosspromotion programs Increased credit card transaction volume and higher penetration of cash transactions Ability to gain market share with traditional cashonly retailers Increased revenue from equipment sales and monthly leases Ability to offer new value-added services that capitalize on the increased functionality of RF-based contactless smart cards Deeper penetration of cash transactions in traditional cash-only retail segments (e.g., QSRs) Increased usage of credit cards at high traffic retailers, further increasing transaction volumes Increased revenue through enhanced cobranded cards Reduction in counterfeit fraud Ability to implement multi-application cards, incorporating payment, loyalty, prepaid/gift and other applications Ability to offer multiretailer programs The market momentum is building for RF-based contactless payments. With all of the major card associations launching contactless payment initiatives and with the positive results achieved in early implementations, RF-based contactless payment solutions are expected to deploy quickly in many geographic markets. The value proposition for all participants in a contactless payment transaction is clear. Consumers enjoy increased convenience and faster checkout times. Retailers can quickly and easily take advantage of this emerging new payment technology to speed transaction processing, increase revenue, and better understand customer-buying behavior. With RF-based contactless smart cards, transactions are more secure and the technology s multi-application capability allows retailers, acquirers and issuers to implement creative new programs (e.g., RF-based contactless implementations of loyalty programs, prepaid/gift cards and other single or multiple-retailer promotion programs). The replacement of cash with RF-based contactless credit card payment also allows acquirers and issuers to increase transaction volume and revenue. ViVOtech provides a unique contactless payment solution, lowering the risk to the retailer and acquirer by leveraging the existing installed payment infrastructure and allowing implementations to start with a small investment. The ViVOpay contactless payment terminal can be quickly and easily installed, enabling retailers to accept RF-based contactless credit cards in minutes and providing acquirers and ISOs with an enhanced payment solution for their customers. The case for contactless payment is clear; in the present and the future. And ViVOtech is the solution. By partnering with ViVOtech, retailers and acquirers can achieve increased differentiation, a strategic market advantage and increased sales by acting quickly to implement an RF-based contactless payment solution. 24

25 References The Rush To Contactless Payments, Card Technology, Cover Story, January, 2004 Issue MasterCard Plans Big Contactless Push In 2004 Card Technology Magazine News Bulletin, December 2003 American Express Leaves Home With ExpressPay Card Technology Magazine News Bulletin, November 03 MasterCard PayPass Trials and Survey Demonstrate Momentum of Contactless Payments MasterCard International Press Release, November 03 Amex Tests Wave- N-Go Payment, Card Technology, March 6, 2003 Consumer Payment Systems, The Nilson Report, Number 777, December 2002 Contactless Payment and the Retail Point of Sale: Applications, Technologies and Transaction Models, Smart Card Alliance white paper, March 2003 James Crawford, Building Smarter Stores, Forrester Research, August 2002 James Crawford, Identity: The Changing Relationship between Consumers and Retailers, presentation at Smart Card Alliance Mid-Winter Conference, Forrester Research, February 13, 2003 Fred P. Gore, Payment Cards Represent an Increasingly Popular Choice on the QSR Menu, Transaction World, December 2002 Michelle Higgins, Short on Gift Ideas? Think Plastic, Wall Street Journal, November 13, 2002 Kelly Hlavinka, Fostering a Renaissance in Private-label Loyalty, CREDITtalk, Frequency Marketing, Inc., August 2002 JCB Readies New Smart Card, TechWeb, March 7, 2003 Lavonne Kuykendall, A Catalog of Reasons for Sears Card Profits, The American Banker, March 14, 2002 Patrick LaPointe, The Future of Loyalty Marketing, TRENDtalk, Frequency Marketing, Inc., March 2002 McDonald s to accept plastic, CNNMoney, November 26, 2002 Matthew Miller, Received Wisdom, CommVerge, November 1, 2002 New Generation of Payments Calls for Proximity, Visa International web site New MasterCard PayPass Utilizes Contactless Card Payment Technology, MasterCard press release, December 12, 2002 Survey Shows Consumers Buying More, Spending More on Gift Cards for Friends, Relatives and Themselves, ValueLink press release, October 29, 2002 U.S. Smart Card Breakthrough, The Nilson Report, Number 780, January 2003 Visa Develops Global Payment Specification for Contactless Smart Cards, Visa release, September 19, 2002 Visa, MasterCard diverge on proximity payments, European Card Review, August 2002 Visa Payment Card Acceptance Helps the Bottom Line of Quick Service Restaurant Partners, Visa press release, November 11, 2002 Visa Selects ISO as its standard for global contactless payments, ContactlessNews, December 2002 Visa, Sony and Infineon Form Strategic Alliance for Smart Cards, press release, March 11,