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Last Updated: Monday, 3 September 2007, 10:19 GMT 11:19 UK
Touch-and-pay card launched in UK
Mastercard PayPass
Newsagents are among the shops to accept contactless payment.
A card that allows shoppers to buy items costing less than 10 without using a Pin number has been launched.

Mastercard has launched the PayPass system in London ahead of a UK rollout, saying it will cut queues and the need to carry cash.

Users pay for their goods by touching the card on a reader and the money is then deducted from their bank account or added to their credit card bill.

However, critics have highlighted security concerns.

PayPass is already used in 19 countries, including the US, which is the biggest, and has 16 million users overall. Meanwhile, Barclaycard plans to launch its own version of the system next week.

'Progress'

The UK roll-out has begun at some London retailers with newsagents and cafes among the first to use the so-called "contactless" technology.

PayPass uses a chip integrated into credit and debit cards, and operates in a similar way to the Oyster cards used on the London Transport system.

We're simply responding to consumer need for speed and convenience
Oliver Steeley, Mastercard

Mastercard head of strategy and business Oliver Steeley said that fraudulent use - if a PayPass was lost or stolen - would be limited as users still need to enter their Pin number after a certain amount of consecutive transactions.

But he admitted the card could be used up to five times - with a potential 50 being spent - before this happened.

Mr Steeley added that people had initially been sceptical about hole-in-the-wall cash machines and that paying by cheque had, until recently, been common.

"We're simply responding to consumer need for speed and convenience, especially at busy times of day," Mr Steeley said. "You can't stand in the way of progress."

Managing director of ATM operator Bank Machine, Ron Delnevo, said he did not think people would embrace the technology and was sceptical that queues would get any shorter.

"I find it curious that the banks and card issuers have spent years persuading us that chip and PIN is a necessity for security reasons and now we've got used to it, they're saying there's no need to bother for certain transactions at certain levels."

He added: "The public are always told it's in the public interest, but really this is in the card issuers' interest, who want to get rid of cash and make more money out of cards and this is one way they see of doing it."


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