A string of payment card issuers have confirmed that they will introduce contactless “wave and pay” cards from September.
The news follows Barclaycard's announcement last week that it would start issuing a contactless payment card combined with the Oyster card used to pay fares on London’s buses and underground.
The cards issued by Bank of Scotland, Citi, Euroconex Technologies, Halifax, HSBC, Lloyds TSB and the Royal Bank of Scotland Group through the Visa Europe and MasterCard schemes will allow users to pay for items worth under £10 using the contactless technology, while also providing standard chip and PIN credit and debit card functions.
Card users will be able to make payments by holding their card up to the contactless reader. The low value transactions will not routinely require users to enter PIN numbers, but card chips will track activity and as a security feature will request a PIN from time to time.
Visa UK managing director Jose San Juan said: “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.”
More than 20bn payments worth less than £10 – with a total value of approximately £200bn – are made in the UK each year.
Industry estimates suggest that more than 5m contactless cards will be issued by the end of 2008 and that they will be accepted by at least 100,000 retailers and other outlets.
The cards will be available in London from September and across the UK from next year. The initial launch will involve a mix of retailers and selected cardholders who regularly use their cards in postcode areas covering the City and London Docklands.
The contactless technology has been developed to a global standard, to allow cardholders to use their cards in other countries where contactless payment technology has been adopted.