Sans purse and wallet, Jennifer Swenson approached the cashier at CVS. When asked for $1.84 to pay for her drink, she waved a silicone bracelet above the credit card reader and headed back to work.
Swenson is among the thousands of U.S. Bancorp employees who are testing the VITAband, a cross between a reloadable prepaid card and medical identification bracelet.
The wrist band uses a radio frequency identification (RFID) chip, which contains a tiny mircochip and radio antenna. The chip communicates wirelessly with the payment reader at the register, transmitting how much you owe and approving the purchase within seconds.
RFID technology is widely used in many industries for tracking inventory, lost pets and vehicles passing though toll roads. But the chip used by banks is more secure, with built-in tools such as dynamic security codes, and can only be read at short distances.
The chip comes attached to an old-fashioned prepaid card with a magnetic strip. Users break off the chip and insert it into a special slot in the U.S. Bank-branded bracelet. Then they can use it at one of 311,000 locations worldwide where MasterCard PayPass is accepted.
U.S. Bank is experimenting with several forms of contactless payments, as financial institutions scramble to keep customers who are increasingly interested in leaving not only their checkbooks but also their wallets at home.
In addition to the payment bracelet, U.S. Bank has tested mobile payments via iPhone and recently launched a new FlexPerks Signature Visa credit card that works with both the magnetic strip swipe technology and contactless payment technology seen in the United States and the chip readers used in many countries overseas.
Financial institutions are trying out contactless payments in everything from watches to key fobs to stickers slapped on the back of mobile phones. Although the contactless technology has been around for seven or eight years, less than 2 percent of merchants in the United States have registers that can read the chips, according to Rick Oglesby, a senior analyst at Aite Group. Cost and demand are two of the hurdles.
Dominic Venturo, chief innovation officer for U.S. Bank's payments division, describes two target markets for VITAband: People with chronic health conditions who wear medical identification bracelets and might like the convenience of adding a payment method to the bracelet, and active individuals who don't want to wear a fanny pack when running or worry about their wallet when out for a swim.
The medical identification piece of the band allows individuals to create an online medical profile, which can be accessed using a 1-800 number and unique eight-digit code that are listed on the band. The idea is that an emergency medical responder could call the number and learn the person's ID and medical history.
Swenson used to go for runs without identification. She might stick money in her shoe and buy water with a couple of sweaty dollar bills. She never really thought about what would happen if she was injured and blacked out. With VITAband "I feel more secure," she said.
It's also convenient for running out to grab a snack at work. She's used it at McDonald's, CVS and the Home Depot, but finds acceptance limited at smaller businesses.
According to MasterCard, there are 348 merchant locations within 25 miles of Minneapolis that take the PayPass chip used in the VITAband. They're mostly big-name retailers and restaurants. But you can also buy a Dugout Dog at a Twins game with your VITAband or shop at Sentyrz Liquor and Supermarket in northeast Minneapoils.
Owner Walt Sentyrz Jr. decided to add swipeless payments to the 88-year-old establishment when he replaced the store's payment system earlier this year. "It's just so quick and easy for my girls," he said, referring to his cashiers. "My sales per customer are about one-third of what a Rainbow and Cub are. The only thing I can offer my customers is speed." He said he hasn't seen use of the PayPass yet.
Venturo couldn't say for sure when the blue-and-red band emblazoned with the U.S. Bank logo will be available to the public. The employee test period lasts three months and then the bank will tweak the product. Although pricing hasn't been set, "we do envision that it would be a product consumers would pay for," he said.
Kara McGuire • 612-673-7293,,,source..