The Debut Of "Contactless" Credit Cards |
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JPMorgan Chase and American Express will soon be issuing millions of
new credit cards. The new cards are embedded with a computer chip that
will no longer require consumers to swipe their card and sign a
receipt. Millions of credit card readers will be equipped with new
technology that allows consumers to simply wave their credit card over
the reader and the transaction is complete. The new credit cards and
card readers have been tested in major cities and should be available
nationwide by 2006.
The new "contactless" cards will be great news for merchants who
install the updated card readers. The customer will move in and out of
the checkout line quickly and the merchant will do nothing except issue
a receipt. The new credit cards have sensors that will prevent thieves
from retrieving confidential information about the consumer, which is
encoded on the computer chip. A thief could use the credit card if it
were stolen, but could not get any personal information about the
cardholder.
While the new credit cards will be great news for merchants and
credit card companies, consumers could be at a disadvantage. In cities
in which the new technology has been tested, consumer spending and
frequency of use has risen noticeably. Consumers spent more money with
the new cards and used them more frequently than traditional credit
cards. It is certain that all credit card issuers will soon follow in
offering the new "contactless" credit cards.
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