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Fill up with gas on the way to work and instead of dashing to the booth to pay, simply flash a card at the pump reader. At lunch, go to a Tim Hortons drive-through and instead of counting out exact change, wave your card as you pass by. On the way home, pick up some groceries at the local Loblaws and you're on your way without waiting in line.

All these applications of contactless, or “tap-and-go,” technology are already in place, and more are on the way. According to Boston research company Aberdeen Group, a quarter of North American retailers are using some form of contactless payment today, and 57 per cent intend to have it in place within the next two years. MasterCard's PayPass system has made the fastest gains, with more than 11 million cards and devices already in circulation worldwide, but American Express and Visa are both hustling to sign up banks and merchants for trials and rollouts.

The sales pitch for retailers is compelling: faster service means more customers served, hence more sales. A debit or credit transaction averages 20 seconds per customer; contactless payment is usually processed in less than half that. And studies shows that people tend to make more impulsive purchases when using electronic payments.

There's just one hitch: getting consumers to sign up.

Contactless payment works like any credit or debit transaction, except there is no need to sign receipts or enter PIN numbers. Some systems use preloaded cards that can be used like cash. The key difference is that the card — or sometimes the key fob — never leaves the customer's hand, relaying payment information to the merchant's terminal through a tiny embedded radio-frequency antenna. Instead of magnetic strips, contactless cards contain chips that store and encrypt data.

Contactless payment is primarily aimed at small purchases of $20 or less, and the suppliers see their key market as the so-called Generation Plastic — young adults who, according to a study by Visa, already use debit or credit cards for 40 per cent of all purchases valued at under $25 at least four times weekly. According to Kim Madore, vice-president of emerging technology with Giesecke & Devrient Canada, which manufactures smart cards and currency automation systems, this country is rapidly turning away from cash. “Canadians love paying with plastic,” she says, pointing out that two-thirds of purchases in Canada are already done with some type of card.

Ms. Madore envisions contactless cards and terminals taking over transactions at high-volume retailers of small-ticket items, such as fast-food restaurants, variety stores or movie theatres. Vending machines are another promising arena, with studies showing significant cuts to vandalism on machines using the technology.

Contactless cards and fobs also offer marketing opportunities. “There is no physical interaction with a terminal, so the format can be unique to the individual issuer or merchant,” Ms. Madore says. While the payment processors, including the major credit card companies, have adopted a technology standard, the fobs can be shaped into logos, for example, or put on key chains or bracelets, and the cards need not be the same size.

However, for all this promise to be realized, consumers have to jump on board.

“There has to be a campaign to educate the consumers about the benefits and convenience,” says Sahir Anand, retail analyst with Aberdeen Group. “The issuers are pushing the technology hard but there's a need for the next wave [of promotion]. The consumers have to drive adoption.”

The resistance may in part lie with security concerns. Last year, University of Massachusetts computer scientists found that hackers could “skim” the devices using a wireless frequency. If the card is stolen, there is no signature or PIN verification to keep a thief from maxing out the card. In Asia, meanwhile, consumers have told market researchers that they worry they may get double-charged if they wave the card over the terminal more than once.

Issuers and suppliers stress that contactless payment is, if anything, more secure than other plastic because the consumer never has to hand over the card. As well, many embedded chips come with dynamic encryption that constantly changes security codes to foil hackers.

Perhaps the real breakthrough will happen with the next generation of contactless technology, already growing fast in Asia: mobile commerce, employing a new generation of cellphones equipped with near-field communication (NFC) chips. Not only do cellphones already have wide penetration, but “consumers relate with mobile phones in a more personalized manner,” Mr. Anand says.

After all, you already use your phone as a computer and a media player — it's not a big stretch to make it a wallet.

By the numbers

$1.3-BILLION — Annual value of transactions worth less than $5.

20 to 30 — The extra percentage that fast-food customers spend when using payment cards over those using cash.

69 — The percentage of polled merchants in North America who cited lack of customer response or adoption as the main reason for holding off on contactless payment systems.

Sources: Visa; MasterCard; Aberdeen Group