How Safe Are the New Contactless Payment Systems?

By Evan Schuman  |  Posted 2005-06-20 Print this article Print

As 7-Eleven, Chase, Visa and others move ahead with contactless payment systems, testing at Shell Canada raises questions about read distance that reignites fraud concerns.

As the retail industry starts to embrace contactless payment in a big way—led by $41 billion retailer 7-Eleven and Chase, the nations largest issuer of credit cards—arguments are renewing about just how safe and fraud-proof these cards will be. One key argument is how easily the cards data could be read by a thief, who could then presumably use the information to either steal the customers identity or create a bogus duplicate of the card to make fraudulent purchases. The ambitious bandit might even try both. Security issues are a crucial concern surrounding credit cards, with several recent, highly publicized break-ins making consumers nervous.
The most recent report came on Friday, when MasterCard International reported that a security breach of credit card payment data had exposed about 40 million cards of all brands to potential fraud in what one analyst said was the biggest privacy breach ever.
7-Eleven is taking the retail leadership role in advancing contactless payment. To hear audio of the convenience store chains CIO discussing the move, click here. Contactless advocates have argued that current contactless readers can only "see" the RF chip when its two inches away, making unauthorized scanning for customer data quite difficult. That two-inch argument was touted recently by 7-Eleven CIO Keith Morrow, who pointed to it as a key anti-fraud fact. That distance varies sharply, though, depending on the equipment used to do the testing. Read the full story on How Safe Are the New Contactless Payment Systems?
Evan Schuman is the editor of's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at

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