TD pilots Visa payWave smart cards in Kitchener

TD Canada Trust is getting ready to launch a trial run of a new contactless payment service to cardholders and merchants in the Kitchener and Waterloo, Ont. area.

The Toronto bank is implementing Visa’s payWave technology, which allows cardholders the option of paying for small scale purchases (under $25) by waving their credit or debit cards at a payment reader. Additionally, these small dollar transactions will not require a signature or PIN to complete.

TD Visa cardholders in the Kitchener-Waterloo area will receive dual interface chip and Visa payWave-enabled cards beginning in April. Local merchants will be receiving contactless payment readers, with Dairy Queen and A&W restaurants being the first on board. Arby’s has rolled out similar technology in the United States.

“We want to learn as much as we can from a deployment and usage perspective,” Jeff van Duynhoven, vice-president of TD merchant services, said. “How are merchants reacting to this, how will customers reach out to that, and how we can use that information to plan a national rollout?”

According to van Duynhoven, TD Canada has tentatively pegged fourth quarter 2008 for the technology’s national launch date. But while the bank is targeting quick service restaurants with the trial, it sees the technology’s viability stretching to all merchants.

“Obviously, quick service restaurants are a great category to start with because they do a lot of transactions under $25,” van Duynhoven said. “But we have been in preliminary talks with other merchants in less traditional categories. All merchants are always looking for more forms of payments and this can address that.”

Despite being only in the Kitchener-Waterloo region, the pilot project plans to issue over thousands of cards and over 300 Visa payWave readers. By launching both the chip-enabled cards and the contactless payment readers congruently, the bank hopes to cut down on the confusion and costs to participating cardholders and merchants.

“The time is right, from a cost and convenience point-of-view, for the merchants and the consumers,” Jim Sallas, senior vice-president of personal lending at TD Canada, said. “If you tried to introduce both these things separately we’d have to be reissuing cards twice to people. And the same thing would happen with merchants, they’d have to upgrade their terminals two times. So, we just tried to give it a shot all at once and test it out.”

In addition to TD Canada, the Royal Bank of Canada also announced a partnership with Visa to start a Kitchener-Waterloo trial of its payWave service in 2008.

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