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Last Updated: Tuesday, 8 May 2007, 13:37 GMT 14:37 UK
Touch-and-pay cards get go ahead
Credit and debit cards
The new system may spell the end of small change in your pocket
UK consumers will soon be able to settle bills of less than 10 with a touch of their credit and debit cards.

The system, which is being led by Visa and Mastercard, will be running from September, said payment group Apacs.

Instead of swiping their cards and entering a security code, or signing a receipt, users will only have to hold them against a special secure reader.

Critics have questioned whether the system will be secure enough and warned it may lead to a rise in card fraud.

Roll out

The system got the go-ahead after Visa and Mastercard agreed on an industry standard for the technology they will use.

According to banking industry figures, there are more than 20 billion payments of 10 or less a year in the UK.

Apacs said that more than five million contactless cards are expected to be issued by the end of 2008, and they will be accepted in more than 100,000 outlets.

The companies that have signed up to the first phase of the programme are Royal Bank of Scotland, Halifax, Bank of Scotland, HSBC, Lloyds TSB, Barclaycard, Citi and Euroconex Technologies.

The contactless payment system will at first be used in a limited number of areas and locations.

From September, it will be available in seven London postcodes, running from the City financial district to Canary Wharf. The postcodes where the system will work are EC2, EC3, EC4, E1, E14, SE1 and SE16.

Hopping on

This sort of method of payment is nothing new for Londoners, many of whom already use the Oyster travel card, which allows them to get on buses and the Underground by touching the card to a special yellow reader pad.

Analysts said that the contactless system would be well suited to certain types of retailers and businesses, such as fast-food restaurants, newsagents, pubs, taxis, parking facilities and vending machines.

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