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    Contactless Payment Evolving Slowly

    Written by

    Evan Schuman
    Published March 22, 2006
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      It was apparently a coincidence that two of the biggest names in contactless payment today, Exxon Mobils Speedpass and credit card leader Visa, both announced changes to their contactless payment system on the same day last week.

      The changes were definitely minor tweaks, with Exxon Mobil deploying a much faster way to sign up for Speedpass (taking a weeks-long process down to a few minutes) and Visa rolling out a much smaller form factor, specifically a mini-card suitable for hanging on a keychain.

      The two moves, literally aimed at making the two contactless efforts either faster or smaller, are the companies latest attempt to figure out what is slowing the acceptance of contactless.

      Exxons Speedpass was one of the first successful deployments of contactless consumer technology, right along with the tollbooth accelerating EZPass.

      Back in 2003, Exxon tried to extend that success well beyond gas stations and it announced with great fanfare major trials with the McDonalds fast-food chain in Chicago, Stop & Shop stores nationally and a deal with Timex watches. The Timex deal was hard for me to take too seriously because it just seemed so Dick Tracy/James Bondish.

      Fictional crime-fighting associations notwithstanding, Exxon quietly pulled the plug on all three trials after about a year and decided to stick with gas stations. The reasons are unclear, as a Stop & Shop spokesman said the trial went well and they wanted to continue it. But Exxon turned them down because of “business concerns.”

      Exxon spokesman Don Turk pretty much agreed, offering the odd explanation that “we thought [the trials] were all positive” and that “there were positive results from the consumers.” But the company decided last year to focus all efforts on selling gas.

      Exxon clearly began the trials to try and expand their program and all participants are officially saying the tests went well. So whats behind the change of heart?

      The official Exxon reason is unclear, but for many, its about how companies want to make money and how they decide to spend their time and resources.

      EZPass is mostly a single-application service, which is less toll-paying than access control. Speedpass is more of a payment system, which can be quite strategic when its buying gas, but diluted when its selling hamburgers or Tide detergent. (The Timex deal was always a reach, so we wont go there.)

      Visa, on the other hand, is finding contactless as the next logical extension of its credit card business, so all it needs to do is focus on convenience, speed and accuracy.

      /zimages/2/28571.gifClick here to read about why the RFID revolution has stalled.

      Speed is precisely what Exxon found that it had to resolve. It was ironic that a service that is all about saving a minute or two at the pump, and hence is associated with speed and convenience, was hampered with a wonderfully 20th century registration method.

      Customers had to either download or physically pick up a paper application for Speedpass, submit the application and wait weeks for the device to be snail mailed to them and they then had to call to activate the unit. Thats more like Speedfail.

      The new process can be performed in about two minutes at a participating gas station, using a handheld Symbol wireless unit, which approves the application and issues the programmed contactless payment device right away.

      Put together, these are good indications for retailers who are waiting for contactless payment to get real. As industry leaders clean up their offerings, consumers will likely get interested again.

      Evan Schuman is retail editor for Ziff Davis Internets Enterprise Edit group. He has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop anytime soon. He can be reached at [email protected].

      /zimages/2/28571.gifCheck out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

      Evan Schuman
      Evan Schuman
      Evan Schuman is the editor of CIOInsight.com'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.

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