Contactless Prepaid Cards - Glimpse of the Near Future

The presence of Contactless Prepaid Cards is slowly but steadily becoming more and more visible and it certainly seems that they are here to stay.

Contactless cards differ from regular prepaid cards in the way the information is read from them by the card reader.

A regular prepaid debit card stores its data on a magnetic stripe that must be physically swiped through a card reader or on a microchip which must be inserted into a Chip & PIN device.

A contactless prepaid credit card, on the other hand, stores its data on a microchip embedded in the card's plastic. The microchip is fitted with a radio antenna that is capable of transmitting the card's data to a card reader without physical contact.

Using radio frequency identification (RFID) technology, these cards can transmit data to a special RFID card reader when the cardholder waves his card within a few inches of the receiver.

Q. Who accepts contactless prepaid credit cards?

Up until very recently, these cards were only accepted at select convenience stores, gas stations, movie theaters, and fast food restaurants. However, the drive behind the contactless card movement is to persuade consumers to use plastic conveniently at places that have traditionally been cash-intensive. Doing so would reduce lines and waiting times by speeding transaction times. While few merchants accept the contactless payments right now, the technology is expected to catch on soon and most prepaid card issuers are watching the market trends carefully with widespread rollouts are predicted in the months and years to come.

Q. Who issues contactless prepaid credit cards?

Contactless cards are available from MasterCard PayPass, Visa Contactless and American Express ExpressPay.

There are few examples of successful contactless pre pay cards currently but some successes would be the limited edition MasterCard cards for the Brit Awards as well as a pilot programme to help deliver the first stadium contactless prepaid card in Europe, the Manchester City FC MasterCard(R) Prepaid Seasoncard with PayPass(TM), with MBNA and MasterCard to replace the standard season ticket currently issued to supporters.

The Contactless technologies provided by the leading scheme managers are as follows

* MasterCard Paypass
* Visa Paywave
* American Express Expresspay

One of the biggest dilemmas faced by prepaid card issuers is the area of how to make money with contact less cards as well as how to educate consumers about their use and convince them that contactless cards are indeed safe and secure to use.

With the London Travel Oyster Card and the steadfast commitment of certain banks to delivering contactless prepaid cards, we can rest assured that contactless prepaid cards are undoubtedly going to become more visible in the near future.