ey fobs, digital wallets, enhanced cell phones and other permutations of contactless POS payments haven't reached critical mass among consumers. But their deployment is growing, and with solid backing from card Associations, processors and equipment providers, it may be just a blink before contactless payment devices are as ubiquitous as today's bankcards.

The technology behind contactless payment systems is radio frequency identification (RFID), which is commonly used for tagging and tracking inventory, shipping crates, livestock and more. These traditional uses of RFID do not raise the red flag of privacy.

However, as RFID has been adapted for innovative uses (including POS solutions), many business leaders as well as consumer advocacy and public interest groups have become concerned about the possibility that data from RFID tags or readers could be linked to personally identifiable information. Thus, data could be compromised and used for inappropriate or nefarious purposes.

This and other concerns about RFID use led to the formation of a working group coordinated by the Center for Democracy & Technology (CDT) and comprised of such leaders as Visa U.S.A., VeriSign, Microsoft Corp., Intel Corp., the American Library Association and many more. On May 1, 2006, the group released an interim draft document containing best practices for deployment of RFID technology.

The document provides an overview of RFID's varied uses and practices. It addresses specifics including RFID's intersection with network security and data encryption. It also recommends that security and privacy be built into RFID device design rather than retrofitted later.

"This is one of the most important steps yet taken to ensure that developing RFID technology is not deployed in a manner that threatens the privacy of individuals," said Paula Bruening, Staff Counsel for CDT.

The document is available at www.cdt.org/privacy/20060501rfid-best-practices.php. It's your chance to view the guidelines, give feedback and help ensure that your merchant customers have the best guidance possible when they jump on the contactless payments bandwagon.