Hond Financial

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 prepaid 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, a contactless prepaid credit card can transmit data to a special RFID card reader when the cardholder waves his card within a few inches of the receiver.

> Who accepts contactless prepaid credit cards?

Up until a short while back, you could only use contactless prepaid credit cards at a handful of convenience stores, gas stations, movie theaters, and fast food restaurants. However, the main driving force behind contactless card movement is to persuade consumers to use plastic conveniently at places where cash may have been the main currency traditionally. Doing so would speed transaction times and reduce lines. 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.

> Who issues contactless prepaid credit cards?

Contactless prepaid cards are available from the major scheme providers with badges such as MasterCard PayPass, Visa Contactless and American Express ExpressPay.

There are few examples of successful contactless prepaid cards currently but some successes would be the limited edition MasterCard contactless prepaid cards for the 2007 Brit Awards as well as a pilot programme to help deliver the first stadium contactless prepaid card in Europe, the Manchester City FC MasterCard® Prepaid Seasoncard with PayPass™, 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 contactless prepaid cards as well as how to educate consumers about their use and convince them that contactless prepaid 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.

Compare and Review Prepaid Credit Cards at Prepaid365 – the prepaid card comparison portal.

Comments are closed.