Texas Instruments Inc. says it has developed the first payment chip that meets the range standard for MasterCard International’s PayPass contactless cards and is small enough to allow the normal embossing of cardholder information.
Trevor Pavey, the contactless payments manager for the Dallas microchip company, said the radio frequency identification chip can be read from up to four centimeters away and can process transactions in 400 milliseconds. Also, the antenna is small enough to embed into a normal-size card with enough room to emboss the cardholder’s name, account number, and other typical information along the bottom.
Card manufacturers will start offering products with the chip in June or July, he said, and Texas Instruments is in discussions with the top five issuing banks to offer cards with the chip to consumers.
Range is typically a function of the chip’s antenna size, Mr. Pavey said, but the need to emboss information on a contactless card — a process that can damage the antenna — restricts the options for the chip.
Some contactless chips use a small antenna to create a space that can be embossed, but this can sacrifice range; others use a large antenna but permit only limited embossing.
Mr. Pavey said that cards with small antennas must be held against the scanner for a longer period of time than cards that can be read from farther away. At MasterCard, “they want a tap-and-go experience, which you can get at four centimeters,” he said.
Murdo Munro, MasterCard’s vice president for mobile and wireless products, said some of the fully embossed PayPass cards currently available do not work at four centimeters, though they come close.
“Because they’re actually very quick at three centimeters or two centimeters, we’re not noticing significant usability problems, so we approved them,” he said.
Texas Instruments’ combination of range and chip speed falls within the range that MasterCard has required, Mr. Munro said.
He would not quantify those requirements, except to say, “We’re not specifically saying a speed we’re after. What we’re trying to get is a consistent experience for the consumer.”
Mr. Munro also said that some vendors, which he would not name, have managed to deliver chip speeds of less than 200 milliseconds with chips that have a range of less than four centimeters.
MasterCard announced on Jan. 31 that it was testing a PayPass-based subway fare payment system for the New York Metropolitan Transportation Authority. The MTA required that MasterCard’s system read the card and approve the transactions in no more than 300 milliseconds.
Dan Schatt, a senior analyst for the Boston market research firm Celent Communications LLC, said that Texas Instruments’ chips would offer “a meaningful difference for those businesses where speed is first and foremost.”
Josh Kessler, an analyst with the emerging technologies practice at TowerGroup, the Needham, Mass., research unit of MasterCard International, said that by allowing the full embossing, the Texas Instruments chip could be used for affinity card products without requiring issuers to change the design of the cards.
