Contactless Payment

It seems the in thing from banks now is 'contactless payment'.  This allows small transactions to be made without putting your payment card into a reader, and for the majority of transactions, without entering a PIN

On the surface this seems like a good thing, eliminating the fiddling around for small change and speeding up these transactions.  However it appears that we have another case whereby neither side is prepared to invest in a full roll out.

To be of much use, not only do the majority of card suppliers need to offer it, but also we need a large infrastructure in the places where it could be useful.

I read recently that my bank would be implementing the technology from December 2011 on it's Visa cards.  As my Visa debit card with them was due for renewal soon I thought I would ask whether my replacement card would include this technology.

Their response was - No, we are not implementing this in our debit cards at present and cannot say when and if we will do so in future.  Seemingly it is being implemented in credit cards only.  It will also be added to a very small number of smartphones, but again charged either to a credit card or phone account.

Most people like myself would not wish to run up all these transactions on a credit card, the debit card being the logical option as it replaces visits to the cash machine.

So from the point of cards, it seems we have a limited roll out.

Now look at the other side, the places where they can be used.  So far this appears to be some coffee shops and I have seen them in Little Chef.  I don't frequent coffee shops often and a typical LC bill would exceed the £15 limit on these transactions anyway.

How about implementing it on buses and trams, and small shops where people do make small transactions typically in cash?  Unlikely to happen because the retailer is unlikely to see a benefit for the investment they will have to make in the readers.

So we are stuck.  Card suppliers will be reluctant to make it widely available as there are few places to use it, retailers will be reluctant to invest as their are so few cards out there.  Catch 22.

If it is so wonderful then why don't the promoters (who I assume to be the banks and card companies) back it properly and get a decent roll out?

I wonder if the fact that it's fraud implications haven't yet been fully tested is also worrying some.  With a limit of £15 per transaction and a request for a PIN being likely to be made only every 5 or so transactions it would be possible for a stolen card to be used for say £60 before it is even noticed.  Are the card issuers / banks prepared to fund this?