The Credit card industry has witnessed a phenomenal growth over the last couple of years but even with all the growth and the statistical numbers there have been security and other issues. Now all those concerns could well be a thing of the past as the industry tries various innovative ways to work their way around all the existing problems. Amid all the promising technologies, the two main attractive innovations for now include gadgets such as radio-frequency credit cards and payment making cell phones. The cards are embedded with radio frequency chips and the owner can pay by tapping or waving the card in front of a specially equipped reader. Contactless credit cards have already been introduced in the US with a good success rate. Contactless cards are designed to entice consumers to put more spending on plastic by making it easier than paying cash and are the most visible sign of a transformation reshaping the credit card industry. Card executives bet they can reignite profit growth by using radio-frequency credit cards and other devices to capture more of the $4.4 trillion in annual U.S. spending now done through cash and checks. But getting the world to embrace new technology is not easy. Consumer advocates have already raised concerns about security of radio-frequency payments. And, like other longstanding habits, consumers appear reluctant to alter the way they've been paying for decades. But change is occurring slowly. Observers feel that radio-frequency credit cards are faster and more convenient both for consumers and retailers, saving them from having to make change or bother with signed receipts.
The card transmits all the information to complete the transaction to the reader. The reader emits electromagnetic waves that activate the card's radio-frequency chip that then sends the cardholder's information to the reader. Critics on the other hand say that Card banks have to overcome questions about security as well but Credit card executives downplay concerns, saying cards only transmit when held within a few inches of the reader, making it difficult for fraudsters to intercept. And even if it is stolen, the data's encrypted, meaning scrambled into a secret code, card executives say. Further, they say, people generally have no liability when their cards are used fraudulently. Although banks haven't been entirely successful in dispelling security questions, contactless cards do seem to be catching on. Some big consumer applications for RFID technology are already here. One little known but widely deployed consumer application for RFID is in car keys. A sensor in the steering column detects the chip in the key and lets you turn the car on, preventing thieves from using a counterfeit key that doesn't have a chip. Many car companies use the chipped keys, and market research firm In-Stat estimated in January that about 150 million car keys have been outfitted with the technology since 1991.
Looking beyond contactless cards customers may soon be paying with their cell phones, their I-Pods or even their thumb prints. There have been a lot of tests including cell phones where the phones were embedded with radio-frequency chips so customers could pay by waving their phones in front of the readers. Which technology finally gets the nod from the consumers and the banks is still uncertain but one thing is sure that the Credit Card industry is slowly but surely looking to grow. more info here.
