Barclaycard agrees smartcard deal

Barclaycard has signed an exclusive three-year contract to combine Visa with the Oyster travel card, paving the way for contactless payments in London.

TranSys, the consortium that delivers the Oyster smartcard for Transport for London (TfL), has issued the licence and the first cards will be available early in the new year.

The new Visa card will include Oyster chip-and-PIN functionality and allow users to pay for low-value goods.

Cardholders will be able to pay for items by waving the card over a contactless reader in participating shops. The first trial will be conducted in London in early 2007 and full rollout will take place later in the year.

A Barclaycard spokeswoman says the deal puts the firm and its customers at the forefront of the developing technology.

‘We expect the use of contactless technology to grow rapidly,’ she said. ‘Our customers will benefit from quicker and more convenient purchases.’

The payment method could be used for values of less than £10 at fast food outlets, coffee shops, newsagents, off licences, bars, pubs and for parking facilities.

TranSys has been in discussions with a number of third parties regarding the licensing of Oyster, including mobile phone and watch manufacturers.

Ovum analyst Graham Titterington says Oyster initially planned to offer contactless payments, but cost and technical setbacks forced it to abandon the scheme.

‘It is a very good deal for Barclaycard. It is the first development in this field and is a three-year exclusive agreement, after which if the technology is proven could lead to greater consumer acceptance,’ he said.

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Further reading

TfL pulls plug on e-money

Rail firm to upgrade for smartcards

Visa to trial contactless payments