Subway's Canada stores to try Visa's contactless payment

Visa announced April 30 that its newest form of payment, called payWave, would be available in participating Subway stores in Canada. "It's exciting to see one of Canada's largest restaurant chains offering the convenience of contactless payments to Visa cardholders," said Mike Bradley, head of products, Visa Canada, in a press release.

However, Marina O'Rourke, the sandwich chain's director of retail technology, expressed more apprehension about the sandwich vendor's agreement with Visa.  "We are looking forward to the opportunity to understand the impact of contactless on speed of service as well as understanding how many of our customers take advantage of this payment method," O'Rourke said.

Contactless payment systems, marketed  by Visa as "wave and go" cards, can come in the form of credit cards, smart cards, key fobs or other devices, and allow consumers to pay by waving their devices over a reader to make a purchase, rather than swiping it as with a traditional credit card. Contactless payment uses radio-frequency identification (RFID) tags embedded in its devices to read and track purchases through the use of radio waves. Because signatures are often not required for purchases less than $25, suppliers have said contactless payment can be significantly faster than using cash, credit or debit. "Visa's global experience has shown that contactless payments are transacted more quickly and are more convenient than cash for smaller purchases like Subway sandwiches," Bradley said.

However, contactless payment, originally predicted to increase rapidly in popularity, has been hindered by challenges including defective equipment and security concerns, but mostly by a lack of interest among consumers. Critics of contactless have said there is not much more convenience in the card as opposed to traditional swiping, and no retailers have offered discount programs to encourage consumers to make the switch. Consumer hesitation has already led to the demise of other contactless systems, such as that of American Express, which announced it was killing its ExpressPay keyfob in April 2008, six years after the issuer had begun to offer it.

According to some industry experts, Subway, which has often been at the forefront of sampling new payment technology, will be a valuable model of whether or not contactless will be a viable system.

Published May 8, 2009

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