Radio Transmitter Credit Cards

The fans at an Atlanta music festival didn't know it, but they were part of a banking experiment to move us into the fast lane of a cashless society.

While many waited to pay, others waltzed right through a sort of EZ Pass lane with the next generation of credit cards.

"It was just easy, crossed the little thing and it was over with," says one fan.

As CBS' Brett Larson reports, "it was over in a 'blink.'"

Blink is one of several new cards that work simply by tapping, or waving the card on a reader.

The cards contain a tiny radio transmitter that sends a low-power signal to the merchant's reader.

The card and the reader swap specially coded, or encrypted messages, and in as little as five seconds, the transaction is approved and the customer is on the way.

Most customers like the speed.

"Instead of swiping and signing, all you got to do is blink and go," says consumer Bill Sims.

"No punching numbers or fooling around," says consumer Charles Vaughn. "You're out of there pretty quick."

But speed is only part of the story. The card companies are banking that customers will use their cards more often, even for small purchases.

When American Express tested its version, customers spent 20 to 30 percent more each time they used the card.

You'll spend faster, but are these cards any safer from fraud?

The companies say sophisticated coding makes every single transaction unique, so even if someone could intercept the signal, they wouldn't be able to do anything with the information.

"The card, the reader and the payment process itself have to line up every single time with the data that's changing on the card for the transaction to happen," says Tom O'Donnell, the senior vice president of Chase.

And the card never leaves your hand, which protects against dishonest employees stealing your number with hidden card readers while you are not looking.

"The credit card companies want you to believe this is going to be safer," says Peter Piazza of "Security Management" magazine.

Piazza says new security features simply make the cards a challenging target for hackers.

"They're going to start taking them apart and they're going to be reverse engineered, and they're going to find out how they work and what their shortcomings are," says Piazza.

Most customers CBS News spoke with dismissed security concerns. Lisa Moore didn't.

"I kind of like the idea of people asking for my ID, maybe that's just old-fashioned," says Moore. "I just like that."

The banking industry is confident such customers are in the minority, and that most are ready and willing to march to the different beat of swipeless credit cards.
  • Jaime Holguin

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