Contactless credit payment to be introduced in London

Contactless credit payment to be introduced in London

Visa and Mastercard will begin in September to offer a new program which will let UK cardholders pay for purchases of £10 or less by simply holding the cards against a secure reader rather than having to swipe the card and then enter a code or sign a receipt. At first, the new payment method will be available only in seven London postcodes in an area that runs from the City financial district to Canary Wharf, according to payment group Apacs. But the group says that by the end of next year it expects that more than five million contact less cards will be in use, and that they will be accepted in over 100,000 outlets.

The concept of touch cards is nothing new to London residents. Many of them already use the Oyster travel card to pay their fares on the bus system and Underground, where quick payment is a plus. Some analysts say that the new system will be especially suited to similar fast-paced businesses such as taxis, vending machines, parking facilities, pubs, fast-food restaurants and newsagents. Those are some of the places where the more than 20 billion purchases of £10 or less take place in the UK each year.

Credit card issuers that have agreed to participate in the first phase of the program include Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM), Halifax and Bank of Scotland, both part of HBOS (LSE: HBOS), HSBC (LSE: HBSA; NYSE: HBC; Euronext: HSBC; SEHK: 005), Lloyds TSB (LSE: LLOY), Barclaycard (LSE: BARC; NYSE: BCS; TYO: 8642), Citi (NYSE: C). Payment processor euroConex Technologies is also a participant. The new system was cleared for use after the two credit card companies agreed on a technology to be used for the transactions. Some critics worry, however, that the system is not secure enough and that its use could contribute to a rise in card fraud.

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