June 21, 2010

Update on Interac's contactless debit rollout

Canadian debit scheme Interac says it has successfully carried out a series of “proof of concept” contactless debit card transactions using Scotiabank cards and TD Merchant Services’ point-of-sale terminals. “We’ll be moving to a mass-market rollout in 2011,” Allen Wright, Interac Association’s vice president of product and services management, tells Payments Business. “TD Merchant Services is already beginning to roll out contactless card readers for Interac Flash.”

Wright says that the pilot, which took place at a number of merchants in downtown Toronto, Ontario, revealed no problems with the contactless Scotiabank debit cards or TD Merchant Services’ contactless card readers.

Payments Business understands that TD is using contactless card readers from NBS Payment Solutions.

Interac is marketing contactless Interac debit payment in Canada as Interac Flash. Working with French contactless payments technology firm Inside Contactless, Interac has developed a platform which offers both contact- and contactless-based debit payments, as well as full compatibility with the EMV security standard.

“Interac Flash uses a full EMV cryptogram to protect the transaction,” Wright says. “We think that the application we developed for Interac Flash is unique in that no magnetic-stripe data is used in the transaction.”

“With contactless payments, there is no risk of anyone being able to replicate the data transmitted from the contactless card to the point-of-sale terminal and commit a fraudulent transaction, as each contactless transaction uses unique, dynamic information,” Charles Walton , executive vice president at Inside Contactless, tells Payments Business.

Wright believes that, given the prevalence of debit in Canada, with 60 percent of card transactions taking place on debit, Canadian consumers will take to Interac Flash. “Trying to persuade people to use a contactless credit card for a small-value purchase, such as buying coffee and a bagel at Tim Horton’s, is more difficult than getting them to use Interac Flash,” he says. “This is because for small-value purchases, people are already either using debit or cash.”

From the merchants’ point-of-view, Interac’s low-cost fee structure will make Interac Flash attractive, Wright adds.

“We’ve provided our micropass® 6008 multi-application, dual-interface chip for Interac Flash,” Inside Contactless’ Walton says. “We also acted as technical consultant on the project for Interac.”

In a statement, Inside Contactless says that the micropass® 6008 supports both ISO 14443-B contactless and ISO 7816 contact protocols. It features a low-power, 16-bit proprietary RISC microprocessor, a native operating system, and a multi-application architecture.






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