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The long slow road to contactless payments. Almost 2 decades along in the technology adoption curve. I was ready for this in 2005. https://money.howstuffworks

The long slow road to contactless payments. Almost 2 decades along in the technology adoption curve. I was ready for this in 2005. https://money.howstuffworks.com/personal-finance/debt-management/blink.htm https://money.howstuffworks.com/personal-finance/debt-manage... If course as the article points out, it wasn’t even new technology back then: “ Not Exactly New Tech Mobile introduced the Speedpass in 1997. Speedpass is a small device on a keychain (called a fob) that users wave in front of the Speedpass logo on gas pumps. The cost of the gas is automatically deducted from the user's Speedpass account”

Spivak 5y ago
That’s not at all comparable since you’re not really paying. By that logic we’ve had contactless payments for hundreds of years in the form of opening a tab at a merchant.
- lmz 5y ago
  That's sounds like stored value or contactless debit. What do you mean "not really paying"?
  - wizzwizz4 5y ago
    It's more like a contactless gift card: since you can't use your change for purchasing something different, the payment is in the purchase of the gift card. It's still got the "contactless" part, though.
  - MattRix 5y ago
    I can see their point. If you already paid in advance, you aren’t really paying again when it subtracts the value from your account.
  - Spivak 5y ago
    You're not actually initiating a transfer of money. Sure, it feels like that but in reality they're just storing your CC info and debiting you either in advance (like gas) or settling up (like hotels). You have to have a prior relationship with the company handling your account and figure out a secondary out-of-band payment flow. The fob doesn't really add anything except as a holder of your account id. The only thing they have in common is the physical action of "boop boop" at a terminal or scanner.
- queuebert 5y ago
  And even when I pay cash, I just throw it at them and run, so no contact there either.
jacquesm 5y ago
EU has contactless paying for a while now, but it uses a chip embedded in the bank card.
- irrational 5y ago
  The US has contactless payment with a chip on the card too, but this is different.
  - hackmiester 5y ago
    How? I was under the impression this tech was the same. Just like our cards’ chips are compatible.
    - woobar 5y ago
      It is different in way that same technology now let you use your phone to accept payment via tap. Not just to pay.
- throwaway894345 5y ago
  I studied abroad in France in 2012--at this time, all European card readers had been chip-based for quite a while and my US credit card didn't have one. I couldn't figure out how to use them and many store clerks had no idea what to do with my magnetic-strip credit card. I went to England in 2019, at which point cards in the US had been updated to use magnetic stripes, and everyone was using tap-to-pay. It turns out my credit card had tap-to-pay support as well but it wasn't widely used in the US (or at least in my sphere). Now it finally seems common-enough here. I'm planning another trip to Europe in the next year... Really eager to see what payments look like nowadays.
  - vishnugupta 5y ago
    It’s tap to pay almost everywhere in the Netherlands. Apple Pay works like charm.
  - user_7832 5y ago
xeromal 5y ago
https://en.wikipedia.org/wiki/Softcard https://en.wikipedia.org/wiki/Softcard I used this payment processor in utah in the early 2010s at Jamba Juices and a few other random places. It was pretty sweet but its name was Isis and that was right around the time Isis started becoming big and I believe they ended up dying off.
- dylan604 5y ago
  Typically, when I see a company changing names, I tend to think they've fucked up something so badly in the past that they hope a name change will remove that stinnk. When you see a name change like this, you're like "yup, good move. hope you did it fast enough!" Avoiding the Isis name was even enough to change the story line for the animated show Archer.
TAKEMYMONEY 5y ago
Technically Speedpass was RFID, Apple Pay and most modern tap-to-pay tech uses NFC
kingkawn 5y ago
Had speedpass back when it first came out, great technology for the time
zikduruqe 5y ago
I remember doing a POC using a Samsung device for NFC ticketing for BART back in 2004.
profmonocle 5y ago
Something I was thinking about the other day is how some modern credit cards technically have four different ways to pay. Swiping pressure-sensitive paper over the raised numbers (the original method) is still possible, though I haven't seen a merchant actually do this since maybe the mid-2000's. Then you have magstripe, chip, and RFID all in the same card. Pretty impressive backwards compatibility, although I think the original copy-to-paper mechanism is finally being phased out, since some new credit cards no longer have raised digits. (My new Visa from Chase has the digits on the back, and they're only slightly embossed and not in the same place. Probably wouldn't work with the old swipers.) I wonder how long until magstripe is phased out?
- toufka 5y ago
  And the numbers themselves that can be entered manually. 5 payment modalities with a thin piece of plastic.
  - Twisell 5y ago
    And what really make this a 5th modality is the required CVV (card verification value) printed on the backside of the card.
    - denimnerd42 5y ago
      From what I know is CVV isn't required if the card is presented in person. The card processor will revoke your agreement if you verify the card is present and it's actually not however.
      - jalk 5y ago
        Which is why I have a habit of removing the cvv from the card(scratching the numbers off) and just remember those 3 digits like an extra pin. This practice is becoming obsolete with MFA solutions like 3Dsecure
      - el-salvador 5y ago
beambot 5y ago
PayPal was founded on this premise in 1998: Contactless payments through Palm Pilots. Wasn't a new idea at that time either.
- snapetom 5y ago
  I distinctly remember, over ten years ago, paying with PayPal at a restaurant in Austin. That's why I have a profile pic on PayPal. The waitress requested I take one as it was the biometric ID method used. I'm pretty sure it was a tap to pay with the app. I can't remember if the other device was also iOS. It was definitely not the kludgy QR codes like it is now. I thought it was so cool, but it never caught on. I read a while later that PayPal was licensing that tech and let the license expire.
seanmcdirmid 5y ago
When I visited Australia in 2015, I was really impressed with the ubiquity and speed of TAP to pay. We aren't quite their in the USA yet, but I do 90% of my payments outside using my Apple watch (with a bit of a lag that I didn't see in Aus). At least we aren't stuck using QR codes.
- deleted 5y ago
  [deleted]
- madeofpalk 5y ago
  2011 was when I saw country McDonalds adopt contactless in Australia. From then it was a pretty quick adoption for it to be ubiquitous. I'm currently on a trip back to Australia and I forgot my wallet (!!), but it's fine because I just use Apple Pay everywhere. It's never once been a problem.
peoplefromibiza 5y ago
In Italy RFID payments have been a thing since 1989 Unfortunately this is one of those cases where being among early adopters wasn't an advantage, in many areas of Italy cash is still the only viable payment method. https://en.m.wikipedia.org/wiki/Telepass https://en.m.wikipedia.org/wiki/Telepass
- pelorat 5y ago
  > in many areas of Italy cash is still the only viable payment method. cough tax avoidance cough
  - peoplefromibiza 5y ago
    As an Italian I can't disagree, cabs not accepting credit cards infuriate me evrytime, but there's also a strong cultural resistance to change here. Also friction plays a part, Italy is the second oldest country in the World on average. My mom uses electronic payments, but I haven't been able to teach her how to pay online or "tap to pay" no matter how hard I tried. I won't even start to talk about my dad, who doesn't even own a smartphone or a mobile phone before the smart ones existed. They prefer to go to the ATM and pay cash, their lifestyle is very far from globalized even though they are strongly against tax evasion and always ask for their receipt. Ironically I've know about Telepass because my parents have been using it for as long as I can remember. My guess is that they trust Telepass because it's backed by a (former) public institution, Autostrade, but they don't trust mobile phone manufacturers or payment processor companies as much. I'm not sure they are completely wrong.
baxtr 5y ago
I worked in the mobile industry back in 2010s. Every carrier had big shiny projects called "mobile payments" going on. They were exploring, together with banking partners how they could revolutionize contactless payments. A key factor why all these project failed wasn't the technology. As you rightly point out, the technology was already available back then. It was mainly the vast differences in business models in the two industries: telcos and banking. The telcos were spoiled back then and expected any service to deliver a margin of at least 30%. Banks operated on a very different operating margin for the transactions. They never got that reconciled. I remember back when Apple introduced Apple Pay many people were stunned by how little they charged. But in the end, that was their key insight to make this work. Quite impressive from a company with very high margins on their core products.
- HWR_14 5y ago
  Given transaction volumes, I imagine Apple will make more money from Apple Pay than the App Store soon, even with an order of magnitude smaller rake.
- deleted 5y ago
  [deleted]
- bduerst 5y ago
  Honestly, I think it was Apple refusing to fully support NFC until 2016 that prevented the market from jumping on contactless payments, at least in the US. They were holding something like a third of the market back from doing it which really made selling adoption to merchants difficult.
  - pdpi 5y ago
    Contactless bank cards were widespread in the UK before Apple or Google had their own payment systems. I think the "real story", as it were, is that the banking industry held contactless payments way more than Apple ever did.
    - bduerst 5y ago
dathinab 5y ago
If Apple wouldn't have effectively crippler innovation by not providing NFC (and later one locking it down) we probably would have contact less payment and many other similar services by now everywhere. I know of multiple pilot projects and startups which where basically killed (or majorly revamped) because just supporting Android wasn't viable and Apples not showing any intention to support NFC. The fact that the NFC we have now is missing a major feature of original NFC isn't helping either (the ability to act as a NFC card if the device it's embedded in is powered of/out of battery).
jiggawatts 5y ago
I haven’t used cash in Australia in about 5 years, maybe longer.

Spivak 5y ago

That’s not at all comparable since you’re not really paying. By that logic we’ve had contactless payments for hundreds of years in the form of opening a tab at a merchant.

lmz 5y ago
That's sounds like stored value or contactless debit. What do you mean "not really paying"?
- wizzwizz4 5y ago
  It's more like a contactless gift card: since you can't use your change for purchasing something different, the payment is in the purchase of the gift card. It's still got the "contactless" part, though.
- MattRix 5y ago
  I can see their point. If you already paid in advance, you aren’t really paying again when it subtracts the value from your account.
- Spivak 5y ago
  You're not actually initiating a transfer of money. Sure, it feels like that but in reality they're just storing your CC info and debiting you either in advance (like gas) or settling up (like hotels). You have to have a prior relationship with the company handling your account and figure out a secondary out-of-band payment flow. The fob doesn't really add anything except as a holder of your account id. The only thing they have in common is the physical action of "boop boop" at a terminal or scanner.
queuebert 5y ago
And even when I pay cash, I just throw it at them and run, so no contact there either.

jacquesm 5y ago

EU has contactless paying for a while now, but it uses a chip embedded in the bank card.

irrational 5y ago
The US has contactless payment with a chip on the card too, but this is different.
- hackmiester 5y ago
  How? I was under the impression this tech was the same. Just like our cards’ chips are compatible.
  - woobar 5y ago
    It is different in way that same technology now let you use your phone to accept payment via tap. Not just to pay.
throwaway894345 5y ago
I studied abroad in France in 2012--at this time, all European card readers had been chip-based for quite a while and my US credit card didn't have one. I couldn't figure out how to use them and many store clerks had no idea what to do with my magnetic-strip credit card. I went to England in 2019, at which point cards in the US had been updated to use magnetic stripes, and everyone was using tap-to-pay. It turns out my credit card had tap-to-pay support as well but it wasn't widely used in the US (or at least in my sphere). Now it finally seems common-enough here. I'm planning another trip to Europe in the next year... Really eager to see what payments look like nowadays.
- vishnugupta 5y ago
  It’s tap to pay almost everywhere in the Netherlands. Apple Pay works like charm.
- user_7832 5y ago

xeromal 5y ago

https://en.wikipedia.org/wiki/Softcard https://en.wikipedia.org/wiki/Softcard I used this payment processor in utah in the early 2010s at Jamba Juices and a few other random places. It was pretty sweet but its name was Isis and that was right around the time Isis started becoming big and I believe they ended up dying off.

dylan604 5y ago
Typically, when I see a company changing names, I tend to think they've fucked up something so badly in the past that they hope a name change will remove that stinnk. When you see a name change like this, you're like "yup, good move. hope you did it fast enough!" Avoiding the Isis name was even enough to change the story line for the animated show Archer.

TAKEMYMONEY 5y ago

Technically Speedpass was RFID, Apple Pay and most modern tap-to-pay tech uses NFC

kingkawn 5y ago

Had speedpass back when it first came out, great technology for the time

zikduruqe 5y ago

I remember doing a POC using a Samsung device for NFC ticketing for BART back in 2004.

profmonocle 5y ago

Something I was thinking about the other day is how some modern credit cards technically have four different ways to pay. Swiping pressure-sensitive paper over the raised numbers (the original method) is still possible, though I haven't seen a merchant actually do this since maybe the mid-2000's. Then you have magstripe, chip, and RFID all in the same card. Pretty impressive backwards compatibility, although I think the original copy-to-paper mechanism is finally being phased out, since some new credit cards no longer have raised digits. (My new Visa from Chase has the digits on the back, and they're only slightly embossed and not in the same place. Probably wouldn't work with the old swipers.) I wonder how long until magstripe is phased out?

toufka 5y ago
And the numbers themselves that can be entered manually. 5 payment modalities with a thin piece of plastic.
- Twisell 5y ago
  And what really make this a 5th modality is the required CVV (card verification value) printed on the backside of the card.
  - denimnerd42 5y ago
    From what I know is CVV isn't required if the card is presented in person. The card processor will revoke your agreement if you verify the card is present and it's actually not however.
    - jalk 5y ago
      Which is why I have a habit of removing the cvv from the card(scratching the numbers off) and just remember those 3 digits like an extra pin. This practice is becoming obsolete with MFA solutions like 3Dsecure
    - el-salvador 5y ago

beambot 5y ago

PayPal was founded on this premise in 1998: Contactless payments through Palm Pilots. Wasn't a new idea at that time either.

snapetom 5y ago
I distinctly remember, over ten years ago, paying with PayPal at a restaurant in Austin. That's why I have a profile pic on PayPal. The waitress requested I take one as it was the biometric ID method used. I'm pretty sure it was a tap to pay with the app. I can't remember if the other device was also iOS. It was definitely not the kludgy QR codes like it is now. I thought it was so cool, but it never caught on. I read a while later that PayPal was licensing that tech and let the license expire.

seanmcdirmid 5y ago

When I visited Australia in 2015, I was really impressed with the ubiquity and speed of TAP to pay. We aren't quite their in the USA yet, but I do 90% of my payments outside using my Apple watch (with a bit of a lag that I didn't see in Aus). At least we aren't stuck using QR codes.

deleted 5y ago
[deleted]
madeofpalk 5y ago
2011 was when I saw country McDonalds adopt contactless in Australia. From then it was a pretty quick adoption for it to be ubiquitous. I'm currently on a trip back to Australia and I forgot my wallet (!!), but it's fine because I just use Apple Pay everywhere. It's never once been a problem.

peoplefromibiza 5y ago

In Italy RFID payments have been a thing since 1989 Unfortunately this is one of those cases where being among early adopters wasn't an advantage, in many areas of Italy cash is still the only viable payment method. https://en.m.wikipedia.org/wiki/Telepass https://en.m.wikipedia.org/wiki/Telepass

pelorat 5y ago
> in many areas of Italy cash is still the only viable payment method. cough tax avoidance cough
- peoplefromibiza 5y ago
  As an Italian I can't disagree, cabs not accepting credit cards infuriate me evrytime, but there's also a strong cultural resistance to change here. Also friction plays a part, Italy is the second oldest country in the World on average. My mom uses electronic payments, but I haven't been able to teach her how to pay online or "tap to pay" no matter how hard I tried. I won't even start to talk about my dad, who doesn't even own a smartphone or a mobile phone before the smart ones existed. They prefer to go to the ATM and pay cash, their lifestyle is very far from globalized even though they are strongly against tax evasion and always ask for their receipt. Ironically I've know about Telepass because my parents have been using it for as long as I can remember. My guess is that they trust Telepass because it's backed by a (former) public institution, Autostrade, but they don't trust mobile phone manufacturers or payment processor companies as much. I'm not sure they are completely wrong.

baxtr 5y ago

I worked in the mobile industry back in 2010s. Every carrier had big shiny projects called "mobile payments" going on. They were exploring, together with banking partners how they could revolutionize contactless payments. A key factor why all these project failed wasn't the technology. As you rightly point out, the technology was already available back then. It was mainly the vast differences in business models in the two industries: telcos and banking. The telcos were spoiled back then and expected any service to deliver a margin of at least 30%. Banks operated on a very different operating margin for the transactions. They never got that reconciled. I remember back when Apple introduced Apple Pay many people were stunned by how little they charged. But in the end, that was their key insight to make this work. Quite impressive from a company with very high margins on their core products.

HWR_14 5y ago
Given transaction volumes, I imagine Apple will make more money from Apple Pay than the App Store soon, even with an order of magnitude smaller rake.
deleted 5y ago
[deleted]
bduerst 5y ago
Honestly, I think it was Apple refusing to fully support NFC until 2016 that prevented the market from jumping on contactless payments, at least in the US. They were holding something like a third of the market back from doing it which really made selling adoption to merchants difficult.
- pdpi 5y ago
  Contactless bank cards were widespread in the UK before Apple or Google had their own payment systems. I think the "real story", as it were, is that the banking industry held contactless payments way more than Apple ever did.
  - bduerst 5y ago

dathinab 5y ago

If Apple wouldn't have effectively crippler innovation by not providing NFC (and later one locking it down) we probably would have contact less payment and many other similar services by now everywhere. I know of multiple pilot projects and startups which where basically killed (or majorly revamped) because just supporting Android wasn't viable and Apples not showing any intention to support NFC. The fact that the NFC we have now is missing a major feature of original NFC isn't helping either (the ability to act as a NFC card if the device it's embedded in is powered of/out of battery).

jiggawatts 5y ago

I haven’t used cash in Australia in about 5 years, maybe longer.