Though it will not yet commit to a full rollout, American Express Co. is expanding its experiment in radio frequency technology.
According to the company's chief information officer, ExpressPay, a microchip program that enables contactless payment transactions, will be tried on Amex Blue cards, the company's showpiece consumer product.
ExpressPay - which is still being tested as a key fob in Phoenix, New York, and Singapore - will be piloted on select Blue cards beginning next month. In an interview Tuesday the chief information officer, Glen Salow, said the chips inside participating Blue cards will get antennae wrapped around them, enabling the cards to be waved rather than swiped for payment. "Or you can just wave your wallet" at the point of sale, Mr. Salow said.
"We think the product will appeal to our Blue cardholders," he said. American Express has other designs for ExpressPay as well, such as using the application for transit cards, mobile phones, and MP3s.
With the demise of Target Corp.'s smart Visa program, Amex Blue is the only major U.S. chip credit card. Analysts have often observed that few Blue customers use the microchip function, which must be read by a separate device, but a contactless application could change that.
Ariana-Michele Moore, an analyst at Celent Communications LLC in Boston, called Amex's ExpressPay Blue pilot program a good idea. "It makes sense to pair chip with RFID, but of course we know where chip has gone in the U.S., which is pretty much nowhere," she said.
Eventually the card industry will combine the two applications, Ms. Moore said. "But it's interesting to see American Express looking for the benefits of that right now. Because if Blue cards do work with RFID, then Amex is going to have a leg up on everyone else."
The project is indicative of the New York company's ambitions to create the next iteration of the plastic card. Mr. Salow said he and David Bonalle, a vice president and general manager with the advanced payments enterprise development group, began thinking about a faster and more convenient way to pay three years ago.
"We worried about [whether] signature is a good enough form of authentication," Mr. Salow said by telephone after his keynote speech at the CardTech/SecurTech conference this week in Washington (the conference was sponsored by American Banker parent Thomson Media). He and Mr. Bonalle also thought the current format for payment cards should not be "the only way to pay without using cash."
Of course, other card companies have had the same idea. Over the past two years payment gadgets such as Discover Financial Service's 2GO, Bank of America Corp.'s mini-card, and MasterCard International's key fob PayPass have come to the market.
MasterCard, of Purchase, N.Y., expects to expand its program, which is still being tested at 15 McDonald's restaurants in Orlando. In a recent statement, Art Kranzley, a MasterCard executive vice president, said 5,000 J.P. Morgan Chase & Co. employee cards had been equipped with PayPass.
McDonald's Corp. said last month that it would stop accepting ExxonMobil's Speedpass in June, after a four-year pilot in 440 Chicago-area restaurants.
Mr. Salow and Mr. Bonalle said American Express, as an independent company that runs a closed-loop network (in contrast to the joint ventures of Visa and MasterCard, which run multiparty networks), is in a better position to introduce new technology. "We're going to be faster because we don't have the association structure," Mr. Salow said.
But Mr. Bonalle also emphasized the need for industry standards. "With ExpressPay, the first thing we did was to figure out how Visa and MasterCard could do it, too," he said. "Whether they go out and actually do it" is a separate story.
