TORONTO – In an effort to simplify things for everyone concerned at NAFCU's Annual Conference, the trade association issued name badges with Radio Frequency Identification technology-or RFID-something the financial services sector is just dipping its toes into. "We had a good reaction to it," NAFCU Executive Vice President Diane Swenson, who headed up the project, said. "It was a lot of work to get the information on the chip but once you did it really lightened the load." From the organization's point of view, they no longer had to track all the little tickets they used to hand out for every event to keep an eye on attendance to determine what was working for their members and what was not. Swenson said they also did not have to worry so much about people losing their tickets too.
"I think the staff thought it was wonderful," she said.
A kiosk was also set up at the convention center where the conference was held for members to be able to scan their own badges and make sure they were signed up for all the events they wanted to attend. "Anytime you try something new, it's always hard," Swenson commented, but she did not hear of any resistance to the new system but only good things.
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She also pointed out that with next year's conference in Hawaii from July 18-21, the RFIDs will make shipping everything a lot easier.
Some large banks have piloted debit cards and credit cards with speed pay options and have seen remarkable results from the programs, and while security is better in some respects, it is still a concern.
Some of the benefits of RFID for consumers include convenience, ease of use by just tapping a pad with the card, and maintaining control of the plastic because the holder never hands the card over, First Annapolis Consulting Senior Consultant Sarah Phelps said.
Merchants also benefit with a speedier checkout in addition to the increased spending and data capture associated with traditional plastic. Additionally, Visa and MasterCard changed their policies to no longer require signatures for purchases under $25, which also speeds things up. This was particularly handy at the fast food restaurants, such as McDonalds and KFC, where the pilots ran in targeted cities. Other pilot locations included select Wawa convenience stores, CVS pharmacies, and a handful of sports stadiums. However, there is still a risk of the cards being stolen and the banks that are issuing RFID cards are doing so with a zero-liability policy for the consumers. The plastic is also allegedly more difficult to replicate, but Phelps said she expects fraudsters to figure it out before too long. The pilots in major cities nationwide by a number of issuers like Chase and Citi have seen increased card usage (23% for MasterCard), increased spending by 20-30%, and materially faster transactions than with cash. Phelps said that so far a number of fast food restaurants, pharmacies, and theaters and stadiums are capable of accepting RFID cards. Phelps expected the RFIDs to be more popular with retailers performing mainly small dollar transactions, but it does require an investment in the technology to be able to accept the cards. What this means for credit unions is that, depending upon Chase's success, they may begin aggressively deploying the new cards. Credit unions should really look into their cardholders' behavior and the benefit of offering the technology to their members, Phelps recommended. Also, with a mass disbursement of new cards like this would require, there would be a heightened opportunity for fraud. [email protected]
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