The sQuidcard is an e-money card that is preloaded with cash and used for purchases below £10.
Adam Smith, chief executive at sQuidcard, which has been developing contactless cards for two years, said the cards being developed by Visa and Mastercard and taken up by banks will prove expensive for the retailers.
He said the low value of transactions make the technology expensive to run, with retailers footing the bill.
“The banks’ systems are very complicated because for them to work they have to go through multi-tiers such as card issuers and card operators, which creates an expensive scheme,” he said.
“If you try and process low value transactions on the existing infrastructure the costs will eat into the margin.”
In contrast, the sQuidcard, which can be integrated with other smartcard services, such as travel cards, uses simple internet technology and has no complex infrastructure, according to Smith. He said the sQuidcard will never charge more than a 1.5% fee.
Smith said the sQuidcard technology is compatible with Mifare contactless smartcard technology and the company is hoping to partner other smartcard providers. “One or two transport companies are already talking to us,” he said.
A Barclaycard spokeswoman confirmed that contactless card payments will go through the same process as debit cards. “Retailers at the moment pay a transaction fee every time they accept a payment and it will be the same,” she said.
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