London gets ready for contactless payments
Pastor Dale Morgan
London gets ready for contactless payments*
No PIN, no signing, no touch required
Added: Nov 26th, 2006 12:27 PM
London gets ready for contactless payments
No PIN, no signing, no touch required
By Chip Mulligan
DETAILS WERE ANNOUNCED of the initial London roll out of a new wave of
contactless debit cards, credit cards and pre-pay cards for payments
under £10.
An extension to the existing Chip and PIN EMV network, Maestro /
MasterCard’s PayPass and Visa's contactless system will allow users to
pay for small goods such as rail tickets, newspapers and beers by waving
their card in front of an RFID sensor on a point of sale or vending machine.
Watch out for this logo to start appearing around you soon.
While, initially, this might sound open to wide scale abuse, with
robbers able to swipe the card and pay for things without challenge, the
maximum transaction size of £10 will help to minimise the risk, and each
card will come with built-in counters that will only allow a certain
number of contactless payments to be made before a PIN must be entered.
This counter is also reset every time a standard Chip and PIN
transaction (so anything over £10) is made, so the card providers
believe that a PIN will only be required in practice every one out of 20
times the card is used.
Initial trials in Scotland, and elsewhere across the world, have shown
very positive feedback from customers and merchants alike, with
cardholders liking the ease-of-use and speed, and merchants the reduced
hassle, especially having to haul less cash around at the end of the day.
The London roll out, itself, will be quite an ambitious affair, with
over half a million new cards issued, and 4,000 updated chip and pin
readers with built-in RFID sensor sent to over a thousand shops within
the central city area and Docklands, starting from September 2007.
By the beginning of 2008 it will start to be rolled out across the whole
of the UK, provided any bugs that have been shown up in the initial
launch have been ironed out.
Fortunately, and unusually for a banking standard, cross-compatibility
has been well thought out, and cards should be capable of being used
across the world.
APACS expect that by 2011, 70% of debit cards and 45% of credit cards
will have been converted to support contactless payments.
Of course, security is a rather major concern. Given that RFID enabled
passports have already been compromised to release private data, one
hopes that the credit cards will be slightly more secure. The banks,
credit card companies and acquirers alike are all aware of what the
stakes are, but initial signs are that around 30% of users do not trust
the system, however this is before the marketing bombardment that we
should all expect.
One thing is certain: the government and banks are serious, and see this
as a war on cash. Official figures estimate that handling of physical
cash is a £4 billion drain on the economy. We can only hope that it goes
slightly better than their war on terror. ì