American Express recently announced its first national rollout of a retail outlet using its contactless payment system called Express Pay. CVS drug stores will be accepting Express Pay at the register.

Personally I find the contactless payment systems to be one of the most exciting near-term uses of RFID.

Let's face it, moving inventory around is pretty boring stuff. There is a lot of money in the industry that will hinge on RFID in supply chains, inventory management, and asset tracking, to be sure. I am not minimizing the eventual financial and productivity gains from industrial RFID usage.

But for sheer mass appeal, RFID-enabled payment systems are much more interesting. These systems are likely to change our lives radically over the next five years. They are already in use today, in some cases in pilot tests, and in other cases in full commercial usage handling transactions each and every day.

These systems are accelerating trends that are already well underway.

The trends I am speaking of are our continued move away from using cash and paper checks. We continue our march toward using electronic transactions at the point of sale, faster and faster each year, as this chart from Epay News demonstrates:



The implementation of the Check 21 law in the United States at the end of October 2004, will only accelerate this trend. This law essentially eliminates the last benefit of using paper checks in a store: it eliminates the check float.

I think 2005 will see these contactless payment systems really heat up.