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Story URL: http://www.silicon.com/financialservices/0,3800010322,39285290,00.htm

Barclays contactless: More cards, more retailers
The death of cash has been greatly exaggerated...

By Jo Best

Published: Monday 08 September 2008

Barclays is preparing to expand its range of 'wave and pay' cards and convince more retailers to accept contactless payments as it seeks to beat its target of getting one million contactless cards out to customers by the end of the year.

Barclays launched its first contactless card, OnePulse one year ago, which combined a normal credit card facilities with Oyster travelcard and contactless payment functionality.

Contactless payment cards, such as Hong Kong's Octopus scheme, can be used to make small purchases or as a ticket for public transport, by swiping the card against a reader.

Tech Hotspots: The list

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Contactless capabilities are now set to be built into additional Barclaycards as the bank aims to better its target for seven figure take up of NFC-enabled cards.

Richard Mould, head of contactless card development at Barclaycard, told silicon.com: "We are 110 percent going to have over a million cards in place over the coming weeks and months. They won't all be OnePulse cards."

A recent trial by O2, which Barclays took part in, found that transport is contactless users' preferred app. According to the mobile operator, 89 per cent of participants in the pilot said they are interested in taking up a mobile Oyster app, compared to 68 per cent who were keen on adopting contactless payments.

Mould declined to say what percentage of OnePulse cardholders actually use their cards to make contactless payments.

According to payments industry association APACS, over five million contactless cards are expected to be issued by the end of 2008, with other 100,000 merchant locations available to accept them.

Currently, around 6,000 terminals take the country accept the OnePulse payments, with the majority centred in the capital.

"While there is a weighting towards London, [terminals] are available in other areas," said Mould. "It makes sense to put them where the cards are but it is an area we will be addressing… Contactless isn't a London thing anymore."

Another area the bank is addressing is persuading more retailers to join the scheme – the likes of Coffee Republic, EAT and Yo! Sushi are already involved. While Mould declined to reveal which retailers Barclays is holding talks with, he said the bank will be making some announcements in the near future.

According to the bank's trial partner O2, mobile contactless payments will need the support of all mobile operators as well as two or three major retailers, with a likely timeframe of five years before the technology is rolled out to the public.

While Barclays believes more uptake of contactless is likely over the next twelve months, it's not putting a timeframe on when the tech will see mass adoption.

"It does partly depend on other institutions because not everyone carries a Barclaycard unfortunately," Mould said.

He added: "It would be naïve to say it will be a replacement for cash… We're very confident it will as ubiquitous as chip and PIN."