Wave-and-pay cards to launch in London

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Londoners will soon be able to buy newspapers, coffee and other small purchases with just a wave of their credit and debit cards, as a banking industry body has confirmed plans to begin rolling out contactless payment technology in September.

The UK payment services trade association APACS announced today that contactless technology will roll out in seven postcodes in east and southeast London, from the City to Canary Wharf, beginning in September.

Customers will be able to pay for transactions under £10 by waving their card over a reader. For security reasons, the chip on the cards will track activity and, every now and then, ask for a PIN.

Visa Europe and MasterCard Europe will lead the autumn launch with their payWave and PayPass cards. Visa expects around 200,000 customers and 2,000 retailers to take part in the initial rollout.

"Today we are giving Londoners a completely new way to pay for low-value items with the launch of contactless payments," said John Bushby , general manager for MasterCard Europe in the UK, Ireland, Nordic and Baltic countries.

The first phase of the wave-and-pay rollout will also include the Bank of Scotland, Barclaycard, Citi, Euroconex, Halifax, HSBC, Lloyds TSB and the Royal Bank of Scotland.

It's set to gradually expand across London and go national by 2008, with some five million cards issued for use at 100,000 shops.

September will also see the launch of the Barclaycard Visa credit card combined with Oyster travelcards, which just finished a successful trial.

The cards could help cut costs associated with the 20 billion transactions under £10 which take place in the UK every year.

"For high volume retail environments, such as coffee shops, express grocery stores and newsagents, where transaction values are low and speed of service is essential, Visa payWave offers a secure, convenient and quick alternative to cash," said Mariano Dima, executive vice president, marketing, Visa Europe. "Visa payWave is set to revolutionise how we pay in Europe and London is going to be at the forefront."

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