ACash Alternative

In an effort to meet consumer preference for electronic payments over cash and check, gasoline/convenience store retailer Hess has embraced the speed, convenience and security of contactless payment technology.

The New York City-based company sought a cutting-edge, alternative-payment solution for on-the-go shoppers at its more than 870 company-operated Hess and Hess Express locations in the eastern United States.

“Our customers increasingly prefer electronic forms of payment over cash, and we wanted to meet this customer need,” said Rick Lawlor, VP retail sales and marketing, Hess Corp. “Also, we’re always looking to enhance the customer experience at Hess locations, especially when it comes to convenience.”

In October, Hess turned to New York City-based MasterCard for its PayPass contactless payment solution. The retailer will begin offering the alternative contactless method starting in early 2010.

This system will allow customers the opportunity to simply tap their PayPass-enabled MasterCard card or device on a PayPass-accepting reader at checkout.

Here is how it works: MasterCard PayPass cards and devices feature an embedded microprocessor chip and use radio frequency technology to transmit card information to the merchant’s point-of-sale terminal to process the transaction. After a consumer taps his or her MasterCard PayPass card or device on a special terminal, payment details are transmitted wirelessly.

Once the card has been authenticated using enhanced security measures, the transaction is processed using the same secure network through which billions of other payment card MasterCard transactions are processed each year.

On a physical level, PayPass provides more consumer control, since the card doesn’t actually leave the hands of the consumer to be swiped by a merchant.

“Pay Pass was very appealing for us because we knew it would speed up transaction time, meet a growing preference for electronic forms of payment and keep the card in our customers’ hands where they feel most comfortable,” Lawlor said.

For added security, the PayPass card or device must also be extremely close to the PayPass terminal to be read, typically within one to two inches.

Each time customers use their MasterCard PayPass, they can access loyalty and rewards benefits associated with their payment card. No signature is required for many purchases under $50.

“We’re very excited about this,” Lawlor said. “It simplifies and improves the payment experience for consumers at the point of sale, which is invaluable.”