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In Midst of RFID Virus Scare, Contactless Payments Remain Sound

Visa weighs in with its take on security of contactless card payments.

Over the past several weeks, the headlines have been screaming about the vulnerability of remote frequency identification tags (RFID) to viruses and attacks on middleware applications. Despite any fears along these lines, however, remote frequency technology in the payments area takes safety to a different level, according to Visa USA.

Although contactless payments carry a contactless chip, the information carried by the chip, the read range of the card and the processing of a transaction are very different from RFID technology used in inventory management, explains Ayman Hammad, group director, product development for Visa USA (San Francisco).

There are three very distinct differences between the technology used in payments and the technology used for other RFID applications, he says. They include:

1. Read distance: RFID tags can be read over long distances while contactless cards must be held up to a reader.
2. Encryption: While RFID tags typically do not use any encryption, contactless payment cards use 128-bit and triple DES encryption.
3. Numeric code: A unique numeric code is generated by contactless chips in payments transactions. Without the code, a transaction is declined by the system.

"VisaNet, Visa's global transactions processing system, is designed with a number of security layers at the network and application layer and examines every single transaction for any fraudulent patterns," Hammad says. "The recent discussion of viruses found in RFID solutions does not impact contactless payments based on these key differences."

Due to the relative safety of these transactions, Hammad thinks the future of contactless payments is quite bright. After several years of development, he says Visa's first pilot occurred back in 2002. "Visa's commercial implementation of contactless did not occur until we had sufficiently tested the platform and had a commercially scalable solution we could offer to any Visa issuer," he comments. "Momentum for contactless payments is very strong in the United States. More than 20,000 merchant locations have installed contactless readers. Visa expects a number of financial institutions will launch contactless programs in '06 and '07."

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