- American Express Co. is expanding a trial program that
uses Texas Instruments Inc. technology to let consumers pay for products
with a key chain.
- In the pilot program, customers swipe their American
Express key chain near a receptor at the cash register, which rings up
a purchase by reading the customer's account information via radio signals.
The technology is known as radio frequency identification, or RFID.
- Early stages of the program have sped up transaction
times and encouraged customers to spend more money, since they don't have
to dig in their pockets for change, New York-based American Express said
Wednesday. "All the feedback we've gotten from customers has been
very good, and the merchants are getting increased throughput," reducing
the time per transaction by 30 to 40 percent, said David Bonalle, American
Express vice president in charge of advanced payment development.
- The original pilot program began last year in an American
Express employee cafeteria. The expanded trial, running in Phoenix, is
open to non-American Express employees and includes the Carl's Jr., Schlotzsky's
Deli, Quiznos Subs and Dairy Queen restaurant chains and Kwik Kopy Printing.
- American Express is paying $2 to $3 for each key chain,
a molded plastic device that contains the chip and radio transmitting equipment,
made by Dallas-based TI.
- That seems like a steep price per customer, but American
Express executives have seen the success of Irving-based ExxonMobil Corp.'s
Speedpass, a payment system that also uses RFID technology.
- "We're really looking at this as an enhancement
to the existing American Express product," Mr. Bonalle said. "It's
a good investment for us."
- American Express could also save money in the long run
because RFID payments can reduce fraud, said Bill Allen, RFID marketing
manager at TI. Encrypted radio signals are significantly harder to decode
than magnetic stripes on credit cards, he said, so transactions with the
key chains could be much safer.
- American Express also views the key chain as an investment
in a new market, Mr. Allen said. The financial company wants to play a
part in small transactions where people normally wouldn't use a credit
card, such as buying a hamburger or a pack of gum.
- "It's a real opportunity for them," he said.
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