Smart Card Alliance Sees Fed’s Easing of Regulation E Receipt Requirements as a Boon for Contactless Payments in the U.S.
Fed ruling that eliminates receipt requirement for transactions under $15 eliminates a significant barrier to micropayments
PRINCETON JUNCTION, NJ, JULY 23, 2007–The director of the Smart Card Alliance said the Federal Reserve Board’s recent decision to modify its Regulation E and eliminate the requirement to provide a receipt for debit purchases under $15 will benefit both consumers and merchants by making smaller transactions quicker and more cost effective.
“Contactless payment adoption at quick service retail stores in the United States took off in part as a result of the payments industry rule changes that waived the requirement of signatures for credit card transactions under $25,” said Randy Vanderhoof, executive director of the Smart Card Alliance. “The Federal Reserve Board ruling will be the start of another wave of locations where consumers can choose payment options other than cash or prepaid tokens or tickets at unmanned machines that demand low-cost, speedy transactions for operators.”
Previously, Regulation E required that a paper receipt be made available to consumers for all EFT and debit card transactions conducted in physical environments, including even those unattended areas like transit, parking and vending machines, where consumers may not expect a receipt. In many of these environments, the cost and operational challenges of receipt printing has limited the deployment of card acceptance terminals. The new rule, effective August 6, 2007, eliminates the receipt requirement for transactions of $15 or less.
Quick-service restaurants, convenience stores and event concessionaires along with vending, parking and transit operators will all benefit from the Fed’s action on Regulation E, according to Vanderhoof. And the opportunity is significant: parking, vending and coin-operated machines alone represent $37 billion in annual spending, according to a report from the Federal Reserve Bank of Philadelphia.
Contactless payment already has great momentum in the United States. Leading banks are issuing millions of contactless credit and debit cards to consumers, and many leading retailers now accept them nationwide. The U.S. transportation industry also has contactless credit and debit card pilots in a number of locations, including transit systems in New York City and Salt Lake City, Utah and on the Ohio Turnpike.
About the Smart Card Alliance
The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.
Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information, please visit http://www.securetechalliance.org.