Shops to shell out on Oyster

London retailers wanting to accept the planned credit card-enabled Oyster travel ticket will have to install new readers to process contactless payments.

Barclaycard, Visa and Transport for London (TfL) are testing a credit card combined with the capital’s transport ticket system (Computing, 18 January).

By the summer, Londoners will be able to use the integrated card to pass through ticket barriers and pay for low-value items by waving the card over a reader.

Retailers already selling Oyster cards will be able to use the same readers to update travel transactions on the combined cards, but will have to install new wave-and-pay readers to accept contactless payments.

Small retailers that rent terminals should be able to plug the new wave-and-pay readers into their existing terminals. Larger retailers that use bespoke terminals may have to integrate the new readers into their system, according to Barclaycard.

The card company has been testing the system at its head office, enabling staff to travel and pay for items in the cafeteria. It plans to extend the trial in March to 2,000 staff at Barclaycard, TfL and TranSys, the IT consortium that delivers Oyster for TfL.

Every possible use of the card is being tested to ensure a positive customer experience, says Barclaycard programme manager Simon Chick.

‘Contactless payment is new, so we must ensure users are comfortable. Communicating the benefits is vital to changing customer behaviour,’ he said.

One priority will be to assure users that sensitive financial information is protected. The system has been specifically designed to ensure data cannot be shared between the payment and travel systems, says TranSys chief executive John Stout.

A dual-interface chip operates independently of the Oyster chip, storing fi nancial information and transmitting it to Barclaycard’s secure database. Oyster payments are transmitted via the TranSys system to its database.

Transys partner EDS adds the Oyster chip to the card before returning it to Barclaycard.

‘The chip holds information on the Oyster card number and the value stored, which is then fed into a central system maintained by TranSys,’ said Stout.

‘We have no access to credit card information.’

Trials of the payment system have followed the same phased approach as the initial introduction of Oyster cards, to ensure travellers understand the technology, says Stout.

Contactless payment is already in use in a number of major programmes in the US, including one run by credit card provider JP Morgan Chase.

But ultimately mass adoption will depend on public acceptance, particularly in terms of concerns about security, says Forrester researcher Bill Nagle.

‘Some consumers are worried about the security of contactless payments and it could come down to who assumes the risk of fraud,’ he said. ‘In the US, banks are providing zero risk to the consumer by either accepting the risk themselves or passing it on to the retailers,’ he said.

What do you think? Email us at feedback@computing.co.uk

Further reading

London opens up Oyster role

Barclaycard agrees smartcard deal

Transport for London pulls plug on e-money