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New credit cards dangle from keychainsCompanies aim to make paying faster, easier
By Jeordan Legon
(CNN) -- New credit cards are smaller than a stick of chewing gum. And a pinky-size keychain wand lets customers pay at the pump. Welcome to the future of digital paying, where checking out is as easy as reaching for car keys. Combining advances in technology with marketing muscle, businesses are spending millions to come up with new forms of payment that make it possible for consumers to charge it even when they've left their wallets behind. Firms are using radio frequency signals, scanners and stronger plastics to make it easier for customers to give in to impulse. It's too soon to know whether the new plastic will go the way of the 8-track. But analysts say in the cutthroat credit card business, impressing finicky customers counts -- especially when a product makes it faster and more convenient to get through a checkout line. "It's a gimmick," said Greg McBride, a Bankrate.com analyst who tracks banking products. "Every day there are new programs. Something to get people to carry a particular card." Death to the wallet?In the past 20 years, customers have learned to love debit cards, which deduct money from bank accounts, eliminating the need for cash. They've also come to consider ATMs indispensable and embraced online banking. But through it all, the wallet has remained a staple. Now, some are wondering whether wallets will someday be passe. "A new generation of consumers who have grown up in an electronic age are more willing to accept and embrace these new payment technologies," said James Harris, an executive with Unisys, which helps companies implement new payment systems. Harris said much of the innovation is fueled not by costumers' needs but because it saves companies money. "It can reduce the cost of processing payments and gives businesses credit for transactions much faster," he said. Discover was the first U.S. financial services company to introduce diminutive cards as a way to stand out from other credit cards. The kidney-shaped Discover cards, introduced in June, come with a keychain and cover, and they've been a hit with the public, said spokeswoman Jennifer Kang. "We're working 'round-the-clock to produce these because the demand is so high," she said. Banks say customers like mini plasticNot to be left behind, Bank of America introduced a mini card in October. It's about half the size of a regular credit card and is made of more-durable plastic with a hole in a corner that lets customers slip it on their keychains. A debit mini card from Bank of America will be introduced in the first quarter of next year, spokeswoman Lisa Gagnon said. The bank is also testing a product it calls QuickWave, which allows customers to wave tiny cards in front of a blue sensor pad to pay for purchases at restaurants and shops in a neighborhood in Charlotte, North Carolina. "People like having things on their keychain. It all comes back to convenience," Gagnon said. Over at ExxonMobil, consumers have been using a keychain payment system for years. The chip-embedded plastic SpeedPass is about an inch long and looks like a tiny, black wand. Customers fill out an application that links their credit card to the wand. Then they use the device to pay at the pump or buy convenience store items at 7,500 Exxon and Mobil stations nationwide. The wand transmits a signal to a sensor that allows the gas station to process the transaction. Paying at the drive-thru
The company says more than 6 million people have signed up for SpeedPass. A pilot program is testing the wand in the drive-thrus and counters of 440 McDonald's restaurants in Chicago, Illinois. "It breeds loyalty," said Betsy Eaton, spokeswoman for ExxonMobil. "It makes it so much easier to get in and out." Critics of the programs say regular-size credit cards work just fine and that because keys are misplaced so often, keychain devices could lead to more cards being lost or stolen. They also raise security issues, saying thieves could steal credit card numbers from dangling keychains. And keychains might be too big to fit in pockets when they look like overloaded charm bracelets. "The question is whether consumers really want everything in one gadget," Bill Tice, managing director of Abt Associates' telecommunications consulting business, told The Orlando Sentinel. "If it incorporates your car keys and credit cards, what happens if it breaks? If that device stops working, your life will stop, too."
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