Product details

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Abstract

MasterCard Paypass uses RFID (radio frequency identification device) tags, in which the built-in chip and antenna enable the consumers to wave their card or fob over a reader at the point-of-sale. Some suppliers claim that the transactions can be almost twice as fast as conventional cash, credit or debit card purchase. As it is not necessary to hand the card to the store employee, there is less chance of losing it. Moreover, no signature is typically required for purchases below $25. Research indicates that consumers are likely to spend more money due to the ease of small transactions. According to the industry analysts, there will be almost 40 million contactless payment devices in use in the US by the end of 2006. Moving a step forward, MasterCard introduced the contactless Paypass system in mobile phones on a trial basis. At the same time these cards are much more exposed. The physical location of a hidden magnetic strip card can''t be traced out. But, within a distance of a few feet, an unscrupulous person with a suitable reader will be able to identify the physical location of all the cards. Although, MasterCard Paypass initially got a positive response in the US, the adaptability and acceptability of the contactless payment is still to be tested on a global scale. The learning objectives of the case are to: (1) understand the evolution of plastic money; (2) have a brief understanding of the security initiatives of MasterCard; (3) understand the pros and cons of Paypass contactless payment system; and (4) have a brief understanding of RFID and near field communication (NFC) technologies. This case is intended for MBA / PGDBM level students and is designed to be part of the banking and strategic management curriculum.
Location:
Industry:
Other setting(s):
2007

About

Abstract

MasterCard Paypass uses RFID (radio frequency identification device) tags, in which the built-in chip and antenna enable the consumers to wave their card or fob over a reader at the point-of-sale. Some suppliers claim that the transactions can be almost twice as fast as conventional cash, credit or debit card purchase. As it is not necessary to hand the card to the store employee, there is less chance of losing it. Moreover, no signature is typically required for purchases below $25. Research indicates that consumers are likely to spend more money due to the ease of small transactions. According to the industry analysts, there will be almost 40 million contactless payment devices in use in the US by the end of 2006. Moving a step forward, MasterCard introduced the contactless Paypass system in mobile phones on a trial basis. At the same time these cards are much more exposed. The physical location of a hidden magnetic strip card can''t be traced out. But, within a distance of a few feet, an unscrupulous person with a suitable reader will be able to identify the physical location of all the cards. Although, MasterCard Paypass initially got a positive response in the US, the adaptability and acceptability of the contactless payment is still to be tested on a global scale. The learning objectives of the case are to: (1) understand the evolution of plastic money; (2) have a brief understanding of the security initiatives of MasterCard; (3) understand the pros and cons of Paypass contactless payment system; and (4) have a brief understanding of RFID and near field communication (NFC) technologies. This case is intended for MBA / PGDBM level students and is designed to be part of the banking and strategic management curriculum.

Settings

Location:
Industry:
Other setting(s):
2007

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