Feb 7, 2007

The problem of multiple contactless cards in your wallet: will consumers choose to have only one?

Tim Jones recently described the problem of NFC enabled mobile phones programmed with multiple payment cards and rewards cards, and how the POS would not know which card to process. The same problem of course exists with having multiple contactless cards in your wallet, a situation which is far more likely to occur in the very near future than running around with a mobile phone loaded with lots of cards. Tim’s interview got me wondering if people are seriously talking about this problem yet.

Here are a few comments I pulled together in around 5 minutes playing around with Google.

ZDNet Australia (30 June 2006):

According to a MasterCard consultant: "If you've got multiple cards in your wallet, or even worse multiple technologies, then when you put it up to the reader, the reader can actually support many different types of contactless payments. So what would happen is you could actually wake up more than one card.

"So at this point the reader basically doesn't know what to do, it can see two cards for instance. However what we actually do is, on the reader, we know there's more than one card. So unfortunately as MasterCard I can't make a payment decision for you. I can't just select your MasterCard. So what I have to do is I have to go back to you, the cardholder, and ask you what would you like to do...

"It does mean if you have multiple contactless cards in your wallet, you would have to select a card to use."

RFid Gazette (10 November 2006):

"These contactless credit cards are expected to become popular for small transactions, so security issues aside, the likelihood that consumers will carry more than one, is increased. A merchant's RFID reader would thus detect more than one card in your pocket, unless you use an anti-RF sleeeve or wallet.

"If you don't use a sleeve (but you should - always use protection), that means you have to remove the desired card from your wallet/ purse. If you do use sleeves, then you still have to remove the right card - not just from your wallet but also from its sleeve. Where exactly is the time saving in that?"

Schneir on Security (7 November 2006 – a couple comments from readers):

“Whats most galling is that you gain almost nothing. Ohh, you don't have to take your card out of your wallet (but you still have to take your wallet out of your pocket), ohhh, what a timesaver....”

“If you don't have to take the credit card out of your wallet how do they know which one to charge? Once this rolls out and you have more than one of these it's saving only the last couple of inches of today's "swipe" action. I'm sorry, I've never felt so burdened by the exertion that I'm willing to accept the greatly increased risks.”

How might this problem get resolved? Security conscious people may simply stay away from contactless cards. So let’s leave out the whole sleeve thing and assume that people that like contactless cards will not worry about the perceived security risks. The people that want contactless cards will like them for the speed, that’s a no-brainer, right? Presumably, they will enjoy not having to take the cards out of their wallet or purse, right? So to avoid the multiple cards conflict, will people that like contactless cards only want to have one in their wallet?

This would put a new spin on the share of wallet battle. The trick is to get merchants to see more value in one contactless payment brand over another, so that they encourage cardholders to use that brand rather than others. Would that cause cardholders to get rid of the other contactless cards in their wallet? Possibly, if customers want to simply hold their wallet up to the reader without pulling a card out. Today, it’s hard to see which brand might succeed in making its cards more attractive to merchants, since all contactless products are absolutely identical.

1 comment:

Dave Birch said...

"So at this point the reader basically doesn't know what to do, it can see two cards for instance. However what we actually do is, on the reader, we know there's more than one card. So unfortunately as MasterCard I can't make a payment decision for you. I can't just select your MasterCard. So what I have to do is I have to go back to you, the cardholder, and ask you what would you like to do..."

This isn't quite right. Under the current specifications, if the reader detects multiple cards that it cannot proceed with a transaction.

I'll put something about this on the Digital Money blog soon.