Contactless payment goes national

Tuesday, 08 May 2007 12:00

Soon customers of all major UK banks will be able to pay for goods by card without taking their plastic from their wallet or purse.

That is because the new "wave and pay" system of contactless payments is set to be extended across the country.

Wave and pay allows you to pay for goods valued less than £10 by simply waving your card in front of a reader - without the need to enter a pin number, sign, or even take your card out of your wallet.

Payments would come direct from bank accounts for Visa debit card holders, or be added to bills for credit card holders.

Commuters in London are already familiar with the technology. The Oyster pre-pay cards used in the capital allow people to load money on, and simply tap their card or wallet on tube barriers or sensors on buses to pay for their journey rather than queuing to buy a ticket or counting out change for a bus fare.

With the potential to cut hassle and speed up queues in newsagents, pubs, fast food outlets and coffee shops, experts are predicting success for the new system.

"I am pleased that the industry has united on standards for cards and terminals that will provide a highly convenient and quick way to pay for low value items," said Visa UK managing director Jose San Juan.

"By the autumn the first UK cardholders will be buying a coffee or a sandwich in a split second, and retailers will enjoy quicker transactions, the security of the payment guarantee and an end to the high costs associated with handling cash."

The new cards will monitor use and periodically require the cardholder to type in their pin number to make sure it is still in the possession of the authorised cardholder. Consumers' legal protection against card fraud is not affected by the new contactless payment system.

The rollout will start in September in London - focused on seven postcodes from the City to Canary Wharf - (EC2, EC3, EC4, E1, E14, SE1, SE16).

After this the upgrade will be expanded across London, followed by a gradual national upgrade in 2008.

You do not have to do anything as part of the upgrade, your card company will contact you as it joins the rollout. More information is available from MasterCard (www.paypass.com) or Visa Europe (http://www.visaeurope.com/aboutvisa/products/visacontactless.jsp).

Currently the following banks are involved in the scheme:

• Bank of Scotland
  
• Barclaycard
  
• Citi
  
• Euroconex Technologies Ltd
  
• Halifax
  
• HSBC
  
• Lloyds TSB
  
• The Royal Bank of Scotland Group

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