The momentum to roll out “wave and pay” or “tap and go” credit cards have stalled, as consumer acceptance did not take hold as much as the card companies predicted. Such smart cards include a radio frequency microchip that when waved or tapped against a special card reader device accept payments similar to the traditional method of swiping a credit card’s magnetic strip through a card reader. The method is meant to be quicker and easier for cardholders and merchants.

Restaurants that accept contactless card transactions include McDonald’s, Arby’s and Jack-In-the-Box, according to the Smart Card Alliance. Other merchants include CVS pharmacies, Walgreens, Sheetz gas stations, and 7-11.

These quick payments can be used even for small purchases like a cup of coffee. Cardholders are not required to provide a signature for most purchases under $25. Stores and restaurants even don’t have to provide a receipt for these under $25 purchases, unless the cardholder asks for one.  Large banks like Chase have led the charge for contactless payments with their Blink cards that were first rolled out five years ago.

This technology has not been widely adopted by prepaid cards. But that could change as the prepaid card industry adapts to the emergence of micropayments.

Interestingly, the technology now seems to be headed into the mobile phone market. The same microchip can be embedded in a mobile phone, eliminating the card altogether. (But how will the lack of the MasterCard or Visa brand mark be interpreted by consumers?)   What the mobile phone brings is the power to communicate via text messaging transactional data anywhere. This opens up a wealth of applications. But will consumers feel these transactions are adequately secure? (We’ll explain how this works in another post.)