The See-It-All Chip

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Today TI is turning its efforts to consumer applications like wireless transactions, helping American Express launch ExpressPay, an alternative to cash for purchases where speed and convenience are important, such as at fast-food restaurants, gas stations and dry cleaners. In July Amex set up a real-world RFID test in Phoenix, Ariz., allowing card users and employees to charge at 200 merchants with an RFID-ready fob attached to a key chain. Amex vice president David Bonalle says RFID pilots have cut transaction time 30% to 50% and average sales have gone up 20% to 30%.

At burger chain Carl's Jr., which is testing ExpressPay, faster lines at the cashier and reduced backups at the drive-through window have brought in new customers. "It's a no-lose situation," says Jason LeVecke, grandson of the chain's founder. Women seem to grasp the advantages of the new system quicker than men--something Amex learned to its surprise in focus groups. "It sure would be easier than fumbling around in my purse," says Tracey Serenka, who had her two sons--Eric, 1, and Jason, 4--in tow at a Carl's Jr. recently. Another advantage over a credit card: there is no name or signature on the fob, and the account number differs from that on the user's regular card, reducing chances that crooks can steal from the account. If the fob is stolen or lost, American Express eats the liability.

Bonalle says the "light came on" for him nearly three years ago, thanks to his wife, who uses ExxonMobil's RFID-based Speedpass fob to pay for gasoline at the pump. At least 6 million people have used Speedpass since its 1997 introduction. But the technology spread far beyond the pump this year after all three major card companies--Amex, Visa and MasterCard--endorsed interoperability standards for RFID payments. Besides the Amex pilot, there have been trials by MasterCard (for its PayPass card in Orlando, Fla.) and Visa (which plans to use RFID-ready phones in Asia). Someday you will stroll down grocery aisles with a PC tablet that uses RFID technology to find products, place deli orders in advance and automatically ring up sales.

So far, Europeans have made the biggest investments. In England retailer Marks & Spencer has spent the past two years rolling out RFID tracking of its gourmet take-home foods, supplied to 200-plus stores by 300 providers. The RFID tags are embedded in some 3.5 million food trays and dollies, allowing the company to track the trays and reducing employee hands-on time 80%. While setup costs for a large company can run from $100 million to $200 million, the efficiencies can amount to 1% of revenues (that's theoretically around $100 million at M&S), says TI's Slinger, which supplied Marks & Spencer. "Companies are talking about payback for the investment in one to two years, even months," he notes.