Wednesday, May 25, 2005
scares the begeebers out of me
Just imagine the convenience of being able to pull out that trusty "Chase" card and waving it everything you wanted to buy? Or simply waiving your card in the air at the restaurant to pay for the bill instead of waiting for the waitress to bring your bill? Oh the conveniences of technology.Ga. Credit-Card Holders 'Blink' Cards May 25, 8:19 AM (ET) By SORAYA NADIA McDONALD
ATLANTA (AP) - About 400,000 credit-card holders in Georgia will be the first in the country to use a new technology that allows them to pay for items by waving their card near a terminal instead of swiping it through a machine.
Residents of Atlanta and 160 other cities in the state will test drive the new "blink" cards, which JPMorgan Chase & Co. ( JPM) will begin mailing to its customers June 1.
Looking into potential markets however, I see a windfall for venders of those little swipey machines the stores use to process your card. See, the store had to buy a special machine that would read your card information from that magnetic strip and then talk to the "bank" to make sure you had a good card with enough balance remaining to make your purchase.
The merchant would buy these machines outright for hundreds of dollars or over time on a lease. (Preferred by the merchant account vendor because they make huge profits on the rental fees.) Now, all their existing merchant clients need new fancy machines to receive the information from the new "blink" cards. Ching baby!
From my reading on MyWay, Google and Yahoo, the new machines will send and receive "encrypted" signals from the card and make a beep when the transaction is complete. This is is supposed to speed up the transaction and make wait times much shorter at checkout. Sounds like a win win for everyone right?
But wait... how exactly does this work anyway? I'm guessing that the machine itself will be doing all the transmitting and receiving and the card will have to be "in range" to be read. According to news reports, no signature is going to be required because the card must be in the presence of the machine to be processed. This just doesn't sound good to me. Having some experience with merchant card readers, merchant accounts, and a good bit of technology I am afraid there might be a gigantic hole to be exploited by those who would steal from you.
The technology exists already to hack into Paris Hilton's T-Mobile Sidekick as we have read in the news, how long will it take our techno-terrorists to create a method of receiving funds from your credit card by simply walking past your wallet or purse? How hard would it be for an unscrupulous individual to rig a laptop with the new card reader set on $200 transactions and walk through the mall singing cha-ching all the way to the bank? Oh sure, each card reader is registered and the money's go right into a merchant account so my scenario is a little far fetched, but simplifying it slightly, I can see the possibility of someone being able to get your credit card number (and what ever other information is available from the card itself) simply by getting close enough to read it.
This technology seems to be creating more holes in the system and I personally think the same amount of time and effort should have been placed into Bio-Identification systems and features at the point of sale. It could be as simple as putting the fingerprint information into the card that would cross reference with the bank database, well in my opinion.
I love technology! I love the new gadgets and features! This new wireless "blink" card scares the begeebers out of me.
