rockymountainnews.com MONday, noVemBer 17, 2008

Greenwood Village-based First Data is betting that your credit card will one day be history. instead of swiping your plas-tic to buy groceries and gas, the payment-processing company predicts that in a few years, you’ll just tap your cell phone on a special reader in order to pay.

But until then, First Data has come up with an interim solution meant to help shoppers transition. called the Go-tag, it’s a sticker that allows a regular cell phone to work like a prepaid gift card.

industry analysts said they see the Go-tag as the first step in a technological coup that prom-ises to be more profitable for card companies and business-es, and more convenient for consumers.

“what First Data is doing is a step in the gradual direction of your phone becoming your wallet,” said nick Holland, an analyst with the aite Group. “it’s training wheels for future mobile payments.”

mobile payments, fast becoming the norm in Japan, are made possible by special chips embedded in cell phones that allow the phones to function like a Visa or mastercard. analysts say the technology will become standard in the united states within five to 10 years, and First Data is trying to stay on the cutting edge.

the company is already a pay-ment-processing giant. it handles $2 trillion worth of credit- and debit-card transactions each year,

GO-Tag and go buy

By Melanie AsmarSPECIAL TO ThE ROCky MOunTAIn nEwS

First Data mobile system allows cell phone to work like a prepaid gift card

So what is this?A GO-Tag is a sticker or key chain tag embedded with a tiny chip that allows it to function like a prepaid gift, debit or credit card.

How does it work?It uses electromagnetic radio fields, or what is known as “contactless technology.” In a practical sense, all you have to do to make a purchase with a GO-Tag is tap it on a special reader.

How much does it cost?It’s unclear. The cost of a GO-Tag will be up to the merchant, such as the coffee shop or grocery store that distributes it to shoppers.

Are there other gadgets like it?There are a few similar products but none that is being made and marketed as heavily as the GO-Tag, according to First Data.

Tech

as well as makes and manages credit cards and prepaid gift cards.

its newest product, the Go-tag, is meant to “bridge and build pathways to the fu-ture,” said Barry mccarthy, president of First Data’s mobile commerce solutions. at an inch and a half square, the Go-tag sticker is embedded with a special special

chip and can be stuck anywhere: on your cell phone, iD badge or watch.

mccarthy and others say that shunning your wallet in favor of your cell phone is easier, faster and more secure. the average time to re-port a lost or stolen wallet is eight to

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12 hours, they say, while the average time to report a lost cell phone is less than an hour.

there are two ways the Go-tag can be used, mccarthy said. First Data has tested the first, known as closed-loop. closed-loop Go-tags work like prepaid gift cards: shoppers transfer money to their Go-tags online and use them at specific places.

the open-loop version connects the Go-tag to shoppers’ bank accounts and allows it to be used like a debit or credit card.

“that’s what you’ll see in the future,” mccarthy said.

For now, the Go-tag is being used in more limited ways. the colorado rapids gave Go- tags in the form of little key chain tags to their season ticket-holders this year. every time ticket-holders buy something at the stadium — hot dogs, t-shirts or more tickets — they can swipe their tags, known as the rapids kickback

card, and earn points. they can redeem the points for prizes.

Jason Linscott, director of ticket sales and service for the rapids, said using the Go-tags as fan loyalty cards is just the first step. next year, they hope to deploy a gift card-type model that would make it possible to reward fans by loading their cards with money.

eventually, Linscott said, the rapids en-vision that the kickback cards would be used like credit and debit cards inside the stadium.

First Data also tested the Go-tag in its own corporate cafeteria and at the Demo-cratic national convention in august. ac-cording to First Data spokeswoman eliza-beth Grice, the company gave out about 5,000 Go-tag pins to visiting delegates and journalists.

the pins were preloaded with $10 each, redeemable for snacks and drinks. nearly half were used to make a total of 3,103

transactions in three days, Grice said. the average transaction was $6.57.

mccarthy said First Data has some big-name companies interested in the Go-tag, but he won’t name names, saying it’s too soon.

“we are past the starting gate,” he said. “But we’re still early.”

SPECIAL TO ThE ROCky

MOunTAIn nEwS

www.firstdata.com.