Whos Afraid of the Big Bad Chase?

Opinion: JP Morgan Chase’s contactless credit card move is scaring consumers needlessly. They should be scared, but not by Chase.

When JP Morgan Chase—the nations largest issuer of credit cards—announced last week that it was incorporating contactless payment capabilities in all upcoming credit cards, it was a huge legitimizing moment for contactless.

It generated lots of consumer buzz for the feature that Chase calls “Blink” and it is most likely the first RFID-enabled payment device that became a punchline on Saturday Night Live. (The JP Morgan folk loved that.)

But for all of the attention, it is technologically dull. It’s not a smartcard, so there’s no great CRM potential.

It houses no security technology that goes beyond what many credit cards—including those from Chase—already have, and it will look and feel like today’s typical credit cards, even down to the magstripe on its back.

When you cut through the hype, all you have is a card that can shave a few seconds—maybe a fraction of a minute—off of a transaction.

For a retailer who makes more money the more people he or she can push through cashier lanes, that absolutely is exciting.

Chase could have done this years ago, but it was waiting for some of the more speed-sensitive merchants—convenience stores, quick-service restaurants, drive-throughs of all types, etc.—to start taking credit cards at all.

It was just a few years since most such locations were overwhelmingly cash-dominant.

For the card to be used contactless, the customer must waive the card about two inches in front of the reader. This doesn’t have the distance of an EZPass, and certainly not the range of anti-theft devices.

But the card never has to leave the hand and that’s where much of the time savings come in.

Scott Rau, who is a senior VP for Chase Bank USA, estimated that a typical quickserve order—from when the order is place to when the customer is driving out the driveway—is about two and a half minutes.

With a contactless-enabled card, Rau said it should be about 20 seconds less. That adds up quickly.

But the initial contactless card will still likely live in a wallet inside a pocket, which requires time to pull out.

Mobil addressed that contactless issue a few years ago with its fob-based SpeedPass, designed to hang off of the keychain. Or EZPass, mounted to a window with a much-greater reader range.

In a few years, don’t be surprised to see contactless payment rings, where groceries can be purchased with a Jedi-like wave of the hand.

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