Missouri bank to offer 'swipeless' debit cards

O'FALLON, Mo. -- PINs and signed receipts? Forget about it.

MasterCard Worldwide announced that Central Bancompany will become the first bank of its kind to offer "PayPass" debit cards that don't need to be swiped to make a purchase.

The technology is already widely used in credit cards and national banks, but Central Bancompany is the first community bank holding company to offer the product.

The Jefferson City-based company owns 14 banks throughout Missouri, Oklahoma, Kansas and Illinois.

The two firms announced the deal Thursday at MasterCard's data center here. About 10,000 of the so-called "PayPass" cards have already been issued, and Central Bancompany will make them available to all its customers.

Bankers said the card's convenience might improve customer service and help draw new account holders.

"We're not talking about the cure for cancer here, but it really does make a difference," said First National Bank of St. Louis president Richard Bagby. "Now we have a debit card that's different from our competitors."

The PayPass cards contain a chip that constantly emits a signal. When passed in front of a special receiver, the signal communicates the purchase information in less than a second.

A user doesn't have to hand the card over to anyone else, and there's no receipt for purchases less than $25. The cards can't be used everywhere.

Merchants need to buy the special scanner that reads the cards. About 55,000 locations have done that nationwide, including movie and restaurant chains.

MasterCard introduced the cards as a way to cut down on transaction time, decreasing consumers' wait at places like movie theaters or fast food restaurants, said Roy Dunbar, president of MasterCard Global Technology and Operations.

The company has issued about 16 million of the cards. The deal with Central Bancompany is part of a larger shift from traditional to PayPass debit cards, Dunbar said.

"My expectation is that you will see more and more PayPass cards over time," he said.

Shifting over to the PayPass model isn't necessarily cheap for banks. Central Bancompany pays about $1 more for each PayPass card it issues -- a cost it won't pass on to consumers, said Alan Stonum, the company's vice president over bank cards.

But the investment is worth it, Bagby said, because there are so few chances for banks to offer new perks to their customers. While other Missouri banks will likely pick up the technology, at least those under the Central Bancompany umbrella have a head start, he said.

Stonum said there's even a large competition to be won -- enticing consumers to use debit cards for more purchases. Losing the swipe might be just enough to do that, he said. "We're trying to attain those transactions that people would be using cash for," he said.