ollowing a year-long pilot program that included 16,000 cardholders and 60 retail locations in the Orlando, Fla. area, MasterCard International will introduce its new payment technology for credit and debit around the country by summer.

PayPass lets cardholders wave their cards over a special reader to make purchases. PayPass is based on technology using an embedded microprocessor chip to transmit account data wirelessly through radio frequency identification (RFID)

The system is designed to speed up transaction times because cardholders don't need to fumble for cash, or hand over or swipe the cards and sign receipts.

The Orlando pilot showed that PayPass transactions were 12 - 18 seconds faster than those made with cash.

The Orlando test targeted smaller purchases of $20 or less made at participating merchants including Chevron, Eckerd drug stores, McDonalds locations and Loews Universal Cineplex. MasterCard hopes PayPass will replace cash in environments like these. The technology is compliant with industry security standards, and consumers may feel increased confidence using a card they don't have to hand over to a clerk or waitperson.

But the system could receive a lukewarm reception from several fronts. The readers cost a few hundred dollars each, so some merchants may be reluctant to install them initially. Also, PayPass' national introduction will be successful only if enough retailers and consumers support it.

The system's convenience may have a downside for consumers (but an upside for merchants and acquirers), say credit counselors. MasterCard's trial program showed a transaction volume increase of 23% and increases in usage frequency and account reactivation.

For consumers already up their eyeballs in debt, the increased ease and speed with which PayPass will let them add to their account balances could have negative consequences.

American consumers have a collective debt of almost $2 trillion, said a November 2003 Federal Reserve report.