• The Wall Street Journal, Monday, March 31, 2008 12:45 PM

American Express is abandoning its "Express Pay" fob--a payment device that attaches to a key chain--six years after it began testing it. It plans to focus on its traditional cards instead--installing computer chips in them that allow customers to hold the card up to an electronic reader instead of swiping it through a device.

"We have actually found that our customers prefer to use the contactless technology through our traditional cards" rather than the key fob, says Richard Flynn, a svp who oversees "cardless" payments at AmEx.

Card issuers have been encouraging merchants to install the new readers, which are supposed to speed customers through checkout lines. Fast-food restaurants and drugstore chains have been among the most enthusiastic merchants to try the new technology. A report issued by Aite Group estimates that some 40,000 merchant locations are already equipped with contactless readers.

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