Contactless paymentswill be a reality
across the UK within a year following an initial roll-out of the
technology in London.
Mastercard is spearheading the introduction of contactless
payments with the launch of its
PayPass system that will enable consumers to pay for goods
under £10 by holding a specially enabled debit or credit card in
front of a reader.
The cards use wireless
radio frequency identification (RFID) technology to transfer
payment information to the reader to enable fast payments at retail
outlets. The system is geared towards retailers with high volumes
of customers making low-value transactions, such as fast-food
suppliers, convenience stores, and public transport offices.
The initial implementation of "tap and go" payments will involve
selected cardholders who regularly use their cards in seven target
areas of the capital and a mix of retailers, including McDonald's,
Krispy Kreme, Coffee Republic, and Books Etc.
The roll-out will be extended across the UK in 2008. It forms
part of a larger European roll-out of the technology by MasterCard
and Visa Europe, which has its own PayWave contactless payment
system.
The two systems build on existing chip and Pin technology. They
were developed to the same international standards and EMV payment
protocol, so retailers will be able to accept any contactless
enabled card regardless of issuing bank or whether the card is Visa
PayWave or MasterCard PayPass.
Contactless payments are being touted as a fast, convenient and
secure for consumers to make low-value purchases, and for retailers
to speed up service, reduce queues, and cut cash-handling
costs.
UK payments association Apacs estimates that more than 5,000,000
contactless cards will be issued by the end of 2008, and that they
will be accepted by at least 100,000 retailers across the UK.