MasterCard And Intel Want To Put Contactless Readers In Laptops—Maybe Even Soon Enough To Matter
E-Commerce has been depending on the trustworthiness of strangers for a long time—customers typing in what might easily be stolen payment-card numbers from thousands of miles away. That might be changing soon, and with a real advantage for E-tailers. On Monday (Nov. 14), MasterCard and Intel announced a push to install a contactless reader in laptops, so they'll function as PayPass readers to take contactless payment cards—with a lot less trust required.
A MasterCard spokesman, Brian Gendron, wouldn't commit to the card brand accepting such transactions as "card present," at least not at this point. It's early—MasterCard and Intel expect to get all the authentication issues nailed down by 2012, with actual payments by laptop-owning online shoppers starting shortly thereafter. But anything that uses built-in hardware to close the gulf between the retailer and the physical card should help push interchange rates down.
The MasterCard/Intel effort wouldn't be the first try at bridging that gap. The idea is something like the PC keyboards with a built-in card-swipe slot, except with a tap instead of a swipe and the improved security designed into contactless cards. That should give the laptop a much better chance at confirming that a bona fide card (or mobile-wallet-equipped phone) has been used on the far end of the wire, especially because a card brand is behind the effort.
Although there's still no way to treat that remote laptop as a true PCI-approved POS device (if you think a PIN pad is too easily tampered with, imagine what a target a laptop that is owned by and fully accessible to a thief makes), at least hardware handshaking and immediate card-number encryption can be built in. That could wring an interchange discount out of the card brands for retailers.
That all promises to be a big improvement over the current "card as far from present as possible" mode that online retailers currently depend on. The downside: Even if the new initiative is a roaring success, it's still only aimed at laptops that fall into one class of products—"Ultrabooks" that contain Intel CPUs. With both desktop PCs and laptops in slow decline, makers of other laptops may not be in a rush to add cost to their products so E-Commerce can get a security boost.
Then again, if enough mobile phones become contactless-capable, the cost of adding those chips to laptops could become negligible—just about the time that M-Commerce makes E-Commerce negligible, too.