A couple months ago, my wristwatch stopped working. While that in itself was not a big event, the timing was quite ironic. The watch broke the same week Timex and ExxonMobil announced they were discontinuing a test in which they were selling various styles of Timex watches with built-in Speedpass transponders.
I bought one of the watches late in 2002 when the companies first announced the pilot. I usually get my gas at a Mobil station not far from home, and I needed a watch. So I thought a watch with a Speedpass transponder was an ideal combination.
When I enrolled in Speedpass I provided Exxon Mobil with information from a payment card. Later, when I tapped the watch on the reader at the pump, the card information would be used to make the payment.
I paid about $45 for the watch, though in reality it cost me a bit more. To impress friends, I'd show how I could just hold my wrist up to the reader at the pump. Even if it wasn't my car, I wound up paying for the gas.
There were some "gee whiz" aspects to having a watch that pays. But when the watch broke in March, a sudden realization hit me. Unless I continued to wear a broken watch (or I got it fixed), I wouldn't be able to use Speedpass to pay for gas. I'd have to go into my wallet and use an actual payment card.
A couple weeks after the watch broke, I purchased a new cell phone. That got me thinking again about contactless payments because MasterCard has conducted tests in which its PayPass contactless payment system is incorporated into cell phones.
While watches break, cell-phone contracts expire, usually after a year or two. And when they do, many if not most people opt to get a new phone with updated technology. Unless the new phone also comes with a contactless chip, the consumer again is left having to swipe a payment card to make a purchase where contactless payments also are accepted.
At one time I believed watches, cell phones or other often-carried devices would do away with the need to also carry plastic. I don't anymore.
But while I do believe incorporating contactless payment transponders into watches or cell phones provides added convenience, vendors also should make sure consumers also receive more permanent devices with contactless capability, such as key fob or cards with built-in transponder chips. That way if the watch breaks or the cell phone is replaced, at least customers can still tap their keys or a wallet on the reader without having to actually reach for a card when initiating payment.
A quick reminder: This is the last issue of Credit Card Management, which is being redesigned and renamed Cards&Payments starting with the June issue. The new magazine, which all CCM subscribers automatically will receive, will continue to address the same topics CCM long has covered. However, Cards&Payments will incorporate more coverage of emerging payment markets, including noncard-based systems.
Authoritative analysis and perspective for every segment of the payments industry
Authoritative analysis and perspective for every segment of the industry
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