Only 4% of consumers are using contactless payment cards - so card companies really do not want to tick them off.
Visa U.S.A. says it is tracking every transaction to figure out what went wrong when something does - as it says rarely happens - and why consumers sometimes ignore the contactless feature. (Many contactless cards also carry conventional magnetic stripes.)
JPMorgan Chase & Co. makes it clear in marketing messages where its contactless Blink card can and cannot be used. The idea is to avoid annoying the users, said Tom O'Donnell, a senior vice president of card services.
Merchants warn that consumers' early experiences must be good ones. "Once you've implemented it, it'd better work all the time, because then you've got really angry customers if it doesn't," said Karen Bird, the director of retail technology for Dunkin' Brands Inc., at a Dec 6 conference.
The same is true even for magnetic-stripe cards, but expectations for those are already well established, said Ms. Bird, whose company runs the Dunkin' Donuts and Baskin-Robbins stores.
Issuers, merchants, and the card associations are pushing contactless cards for low-value transactions. Instead of signing a receipt or punching in a PIN, the user touches the card to a pad that picks up low-intensity radio waves from a chip inside.
JPMorgan Chase introduced the Blink card in May and has put marketing muscle behind it.
Unlike some contactless cards, which are available as small keychain fobs, all Blink cards are card-size. Studies showed that consumers preferred that form "because they're used to paying with their card," Mr. O'Donnell said. The company has issued about 5.5 million Blink cards, he said.
Visa introduced contactless cards in early 2005. Niki Manby, its vice president of market and technology innovation, said merchants caused many of the initial problems by putting the card-reading pads in inappropriate places.
In convenience stores, consumers and cashiers moved some of the readers out of the way, Ms. Manby said. "Having the contactless reader affixed to the counter is very helpful," she said.
At gas stations, she said, the contactless reader works best when it is "flat and flush with the panel" on fuel pumps.
There have been few technology failures at the point of sale, Ms. Manby said; the failure rate is comparable to that of magnetic-stripe cards.
And there is no way to damage contactless cards "that is specific to contactless," Ms. Manby said. Cutting one in half would do it, she said - but of course, that would also ruin a mag-stripe card.
A contactless card might seem to be failing if two of them were within range of a reader, Ms. Manby said - for example, if someone touched it with a wallet with two contactless cards inside. But that is by design, she said.
Nor will a contactless-card transaction go through if the card has not been activated - though the consumer and cashier may not know that is the problem.
"The reader does not distinguish between [types of] unsuccessful transactions," Ms. Manby said, so it is up to the users to figure out what went wrong.
Mr. O'Donnell said JPMorgan Chase replaces Blink cards whose contactless feature fails, even if they still work as mag-stripe cards. If the chip is a dud, it considers the whole card a dud.
The readers are the merchants' responsibility to maintain, he said.
American Express Co. works with merchants "on an individual basis to determine how to best train their employees," said Molly Faust, a spokeswoman. It provides training materials that merchants can distribute to their employees, and it follows up "on a regular basis" to address any training or technology issues that arise.
Ms. Faust said that Amex does not disclose how many contactless cards it has issued, but that all new Blue cards are now contactless.
Aaron McPherson, a payments technology analyst, said he has personally experienced a contactless card failure.
Mr. McPherson, a research manager at International Data Group Inc.'s Financial Insights Inc. in Framingham, Mass., got a contactless card for his personal use.
"I tried to use it at CVS a couple of times," he said. "For a while it just wasn't registering; and then it would register, and then be rejected as a dud card."
Though he is a believer in contactless cards, he warned that even rare failures can irritate consumers.
"I have no idea if that's at all widespread or if it's just me, but it is the kind of thing that tends to happen in these new technology rollouts," Mr. McPherson said. "If too many people have experiences like that, then they don't use them again."
But a strong positive message can overcome scattered difficulties, he said. He said he was impressed by youngsters who were handing out information about Blink cards in New York's Times Square this month.
They knew enough about the cards to tell him which retailers accepted them, he said.
"They really seem to be pushing this, and that's kind of what's turned me into a believer," Mr. McPherson said. "At least for the time being."
Nevertheless, he said, "it's difficult for usage to pick up when you can't use it everywhere and not everyone has one. I think you can expect some bumpy times ahead."
Genie M. Driskill of Synergistics Research Corp. said the 4% of consumers it found this fall to be using contactless cards is the same number as a year earlier. On the plus side, 20% now know such cards exist, up from 15%, said Ms. Driskill, the Atlanta company's chief operating officer and senior vice president of research.
