London retailers have welcomed Transport for London's (TfL's) plans to add electronic money features to its Oyster travel card, saying it could improve business in the capital.

The National Federation of Retail Newsagents (NFRN), which represents 20,000 shops in the UK and Ireland, is providing input into the Oyster e-money scheme, which will allow London commuters to use the smartcard to pay for low-value goods and services at newsagents, fast-food outlets, supermarkets and parking machines.

The retail group says many London newsagents already have the IT infrastructure in place to top up TfL's Oyster travel cards, and believes this could easily be extended to accept smartcard payments for low-value goods.

'We are working with TfL to look at how it would work. It could bring many benefits,' said an NFRN spokeswoman.

Last week TfL announced it had shortlisted seven consortia to bid for the Oyster e-money scheme and hopes to begin trials of the technology by the end of the year.

'Oyster has the largest customer base of all smartcards in the UK, with 2.2 million users and a significant level of public trust,' said Jay Walder, managing director of finance and planning at TfL.

'Extending Oyster to include low-value payments is a natural progression which will make the smartcard even more convenient,' he said.

Companies and consortia bidding to run the project are: alphyra; Barclays; BBVA, Accenture, MTR and Octopus; EDS and JP Morgan; Nucleus; Dexit, Ericsson, Hutchison 3G and Euroconex; and PayPal and Royal Bank of Scotland.

A spokeswoman for TfL also told Computing that it has received initial interest from a number of prominent food and drink retailers, including Pret A Manger, Starbucks and Eat.

TfL first announced its plans for Oyster e-money in March, and says it hopes to use the scheme to generate additional revenues for the London transport system.