“Contactless payment adoption at quick service retail stores in the United States took off in part as a result of the payments industry rule changes that waived the requirement of signatures for credit card transactions under $25,” said Randy Vanderhoof, executive director of the Smart Card Alliance. “The Federal Reserve Board ruling will be the start of another wave of locations where consumers can choose payment options other than cash or prepaid tokens or tickets at unmanned machines that demand low-cost, speedy transactions for operators.”
Previously, Regulation E required that a paper receipt be made available to consumers for all EFT and debit card transactions conducted in physical environments, including even those unattended areas like transit, parking and vending machines, where consumers may not expect a receipt. In many of these environments, the cost and operational challenges of receipt printing has limited the deployment of card acceptance terminals. The new rule, effective August 6, 2007, eliminates the receipt requirement for transactions of $15 or less.
Quick-service restaurants, convenience stores and event concessionaires along with vending, parking, and transit operators will all benefit from the Fed’s action on Regulation E, according to Vanderhoof. And the opportunity is significant: parking, vending and coin-operated machines alone represent $37 billion in annual spending, according to a report from the Federal Reserve Bank of Philadelphia.
Contactless payment already has great momentum in the United States. Leading banks are issuing millions of contactless credit and debit cards to consumers, and many leading retailers now accept them nationwide. The U.S. transportation industry also has contactless credit and debit card pilots in a number of locations, including transit systems in New York City and Salt Lake City, Utah and on the Ohio Turnpike.
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