ontactless technologies at the point of sale are becoming increasingly available not only in quick service restaurants, but also in gas stations, super markets and drug stores. In fact, at the Smart Card Alliance Fall Annual Conference, held in San Francisco in October (see story on page 26 of this issue), speakers presented information making it evident that contactless payment methods, such as RFID, are the one smart technology being widely integrated into payments systems and loyalty programs.

Improvements in wireless data networks and partnerships between card Associations, payment processors and mobile phone manufacturers are all factors contributing to making contactless one of the fastest-growing areas in payments. Major payment industry brands have all standardized on radio-frequency technology under the ISO 14443 standard. The first widespread issuance of contactless-enabled credit cards is expected early in 2005.

Contactless payments at the POS offer several advantages, including security in fast, convenient transactions. They also have the potential to revolutionize the way consumers conduct transactions.

For example, later this year several hundred U.S. residents will test product lines offered through a partnership between MasterCard and Motorola. Consumers will use Motorola phones embedded with Master Card's PayPass wireless payment system chips to conduct secure financial transactions. The solution takes advantage of recent improvements in wireless network coverage areas as well as developments in the technology, including Near Field Communication (NFC), a powerful and secure wireless signal with a range of eight inches.

VeriFone Inc. recently announced certification of its contactless reader module for the Omni 7000MPD payment devices by MasterCard PayPass and American Express ExpressPay. The devices are now being deployed at POS locations.

Wireless carriers are also interested in pursuing mobile commerce, or m-commerce solutions. Through their mobile phone's Internet connection, Verizon Wireless customers can bill transactions directly to their Verizon subscriber accounts instead of a credit card or bank account. This service is provided by Netpace, a company specializing in wireless messaging.