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On money

Chips to expedite paying with cards

By HELEN HUNTLEY
Published September 25, 2005

I'm not sure that a faster way to spend money is really a good thing, but it's coming, ready or not. Pretty soon you won't even have to swipe your debit or credit card to pay for a purchase - just tapping it against the card terminal will be good enough.

Americans love convenience and speed, and this is just one more way of delivering both and getting people to spend more freely in the process.

The touch-and-pay technology works like this: Short-range radio waves transmit account information from a chip in a card or some other device to an antenna in a card terminal. The chips can be built into credit, debit and prepaid credit cards at the option of the issuing bank.

They also can be built into key chain attachments, similar to the SpeedPass key wand Exxon Mobil offers customers. In a Dallas experiment, the chips were even installed in cell phones. In addition to a chip, the cards contain a standard magnetic stripe, allowing them to be used at any card terminal.

There are not many chip cards in circulation yet or many places to use them, but MasterCard is making a big push for chip-based transactions using a system it calls PayPass.

HSBC Bank USA and KeyBank both recently announced they are converting all their debit cards to PayPass cards. Citibank has been issuing key fobs that can be used in place of a debit card at PayPass terminals and plans to issue chip-embedded credit cards. MBNA and Chase also are using the technology.

Relatively few merchants have installed the terminals so far. In Florida, they are available in many CVS stores and some McDonald's restaurants, although a CVS spokesman said they are too new to evaluate. Speed, of course, is the selling point. If they choose, merchants can accept the cards without a signature or PIN number for purchases of less than $25. That is likely to be particularly appealing to fast-food outlets, movie theater box offices and convenience stores.

While I like the idea of speedy service, I wondered whether a chip card in my wallet could be charged when the person in front of me in line made a purchase. MasterCard assured me the cards don't work if you are more than an inch or two away from the terminal, and promised I'd have zero liability if that happened.

The real potential harm is to your bank balance and maybe your waistline. Fast-food restaurants report customers who pay with plastic spend more than those who have to fork over cash.

I am new at investing and would like to buy stock. I called some brokers and they require $1,000 to $2,500 to open an account. Where can I go to buy stock at the going price? I don't have a computer.

Many companies have direct stock purchase programs, but often you have to already own at least one share to join or you have to meet a minimum purchase requirement. One way around those is to join the National Association of Investors Corp. and participate in the organization's Low Cost Investment Plan. Contact the organization through www.better-investing.org or by calling toll-free 1-877-275-6242.

More options are available through Internet brokers such as ShareBuilder (www.sharebuilder.com) but you would need a computer to use them. If you want to invest in stocks, you really should learn how to research them on the Internet. You can use the computer at the public library if you don't want to buy your own.

How do you find out when a company goes back on the market after going through bankruptcy?

Read the financial news and check the company's Web site periodically. Most likely the company's plans will be announced well before the trading resumes.

I am looking for information on Alan Greenspan's future meetings on interest rates. Can you tell me when they will be in 2006?

The Federal Reserve Board's Open Market Committee is expected to meet this year Oct. 24 and Dec. 12. Next year's schedule is Jan. 31-Feb. 1, March 28, May 10, June 28-29, Aug. 8, Sept. 20, Oct. 24 and Dec. 12. The calendar is subject to change. You can keep track of the information at www.federalreserve.gov/FOMC

Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.

[Last modified September 26, 2005, 11:47:17]