Contactless Technology Continues To Have Glitches

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BOSTON — Contactless technology has been pitched as one cure for many of the ills of mobile payments, such as tattered magnetic stripes, but it has a number of problems of its own, notes one new analysis.

Among the problems in contactless technology are dead phone batteries, wrong merchant terminal, terminals that have been turned off or are unrepaired, and locations with no terminals at all.

In hyping mobile payments, many proponents focus on the way point of sale transactions could change, frequently describing people who leave home without their wallets but never without their phones. But that oft-cited cliche is not likely to become reality anytime soon, noted American Banker, an affiliate of Credit Union Journal.

"I'm sure there will be mobile payments, … but I have a hard time believing that I'm not going to still be carrying a wallet at least with my ID and at least with my insurance card," said William Rossiter, the vice president of marketing at the terminal maker Hypercom Corp. "It will be a slow transition."

Nick Holland, a senior analyst at the Yankee Group research firm in Boston, agreed. "For the next, arguably, 20 years, people are still going to be carrying a wallet on them because there are always going to be places that" do not accept contactless cards, Holland said.

When the payments networks several years ago began pushing contactless cards, which let a consumer pay for a transaction by tapping the card against a payment terminal instead of swiping it through, "there was a lack of consistency in terms of telling people what the cards can do," he said.

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