By Andy McCue, 24 November 2006 13:05
NEWS
Visa is planning to introduce contactless 'wave and pay' debit cards to replace low-value cash transactions across the UK by the end of next year.
The technology will allow people to pay for low-value transactions such as coffee and newspapers that total less than £10 by waving their debit card over a reader, without having to sign a receipt or enter a PIN number.
Visa claims this will make transactions quicker and reduce queuing times at checkouts. The technology could also be used in remote or unattended payment situations, such as vending machines, road tolls or parking meters.
Security checks will be made by asking consumers to enter their PIN number after a certain number of transactions.
Visa said its member banks have all signed up to the plan. Visa will introduce the contactless payments in London first and then across the rest of the UK by the end of 2007.
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Sandra Alzetta, Visa Europe Senior VP for consumer market development, said the aim is for a cashless Olympic Games in London in 2012.
Alzetta said more than three-quarters of all cash payments are for less than £10 and the introduction of contactless payments can therefore play a major role in encouraging the use of cards over cash.
Visa is planning on using RFID-enabled dual-use debit cards, based on its own Visa Contactless payment technology, but is also understood to be in talks with mobile manufacturers to use near field communications (NFC) technology that will enable a phone to be used instead of a card.
Visa and its member banks are now working together to get retailers on board and use the contactless payment system, with more details of the launch expected to be available by March 2007.
MasterCard and the Royal Bank of Scotland (RBS) have already announced their own plans to trial contactless debit cards for 1,000 of the high-street bank's staff at the retail outlets at RBS' Edinburgh campus HQ. The pilot will use MasterCard's PayPass technology. But Transport for London put on hold its own plans to add contactless payment functionality to Oyster travel cards earlier this year, citing difficulties in sorting out the commercial arrangements, despite interest from retail outlets such as Pret A Manger.
Comments
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1. anonymous
So, there will be an identity check after a certain number of transactions? What about all the transactions in between? This could be a godsend to an unscrupulous trader.
2. Graham Coles
Oh yes, definitely a major advantage over cash. Especially for fraudsters. Just set your wireless pda to scan for cards and grab a 9.99 transaction as you walk from one end of a railway station to another. It'll make you a fortune.
No contact required, no authorization required, no receipt and as with most cards, you can bet your life hackers will immediately set about seeing how far away they can read these cards with a modified rfid reader.
So far the banks seem to be the only ones getting the advantage of charging people for using their own money.
If the only reason for issuing these things is to speed up transactions, then perhaps retailers should give up on the stupid '1p less than a pound because it sounds cheaper' approach. If they sold things for an even pound instead of the eternally silly 99p then they wouldn't keep needing to sort out so much change at the tills, would they.
The BBC's programme 'The Real Hustle' could probably do an entire series on this one.
3. Sebastian Phillips
Why not go the whole hog and have everybody fitted with an rfid chip then we can just walk out of shops with goods and be billed through our bank accounts.
The government must be rubbing it's hands . A cashless society where everything can be tracked and audited.
George Owell was right!
4. Cameron Olsen, Smart Technology Solutions Ltd (STS)
Visa's launch of contactless cards in the UK has given retailers, for the first time, the opportunity to exploit their EMV (EuroPay, MasterCard, Visa) investment - the global standard infrastructure behind chip and PIN. By exploring the potential of EMV through extending the technology to run new applications, such as contactless cards, retailers can enhance their business performance and customer satisfaction. Aside from the benefits stated by Visa such as reducing cash handling costs, less fraud and eliminating cash shrinkage as well as providing the customer with a better shopping experience through rapid till transactions and shorter queues - recent trials have shown that it can lead to an increase in, in-store expenditure*.
Given the advanced stages of chip & PIN rollout in the UK and costs incurred implementing EMV infrastructure, retailers should look to capitalise on this framework. Utilising devices such as contactless cards – retailers will be able to streamline customer interaction and information gathering processes. Providing future proof EMV framework is in place the cost of upgrading chip and PIN to accommodate this new payment and transactional processes should be relatively low – expenditure on such technology can led to immediate return on investment, increasing profitability and gaining the edge over competitors.
* MasterCard PayPass.com, 2003
5. Mike W
Why can't we just have 'chip and PIN' cash on our cards, as they can in Belgium and France ?
That was such a missed opportunity when C&P was introduced - better security (can be traced/cancelled if your card is stolen), avoids having to carry real cash, no fees for small retailers so it has benefits for them too.