To the Editor:

Regarding "Alliance Backs Contactless Cards as Encryption Option" [Sept. 15], the Smart Card Alliance position paper didn't say end-to-end encryption wasn't a good idea; instead, it made the case that encryption alone is not enough to protect the U.S. payment system.

The approach the paper proposed leverages the current contactless infrastructure that banks and merchants are already supporting. The proposal does not require the full EMV investment that has been done in other parts of the world as cited by Steven M. Elefant.

I dispute Mr. Elefant's estimate for implementing EMV in the United States as being an order of magnitude too high. Javelin Strategy and Research has estimated the cost of a U.S. migration to EMV at $5.5 billion. Three factors support the contention that migrating to contactless would be even cheaper than Javelin's estimate: 1) Contactless POS hardware and card costs are lower than EMV; 2) 5% to 10% of U.S. cards and 1% to 2% of U.S. merchants are already contactless-enabled; and 3) the cost of a contactless implementation with no offline transactions is far less than a full-blown EMV implementation.

I believe the use of contactless cards is a better solution for the entire payments industry for solving the overall fraud problem because it protects the true point of vulnerability, the card.

Deborah Baxley
Managing director
Keypoint Consulting
Cold Spring, N.Y.

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