Sunday, January 24, 2010
MONEY & FINANCE
Contactless credit card hits market
The way consumers use credit cards is set to be changed by the introduction of a new, hassle-free product.
High street bank Barclays and mobile phone network Orange have teamed up to introduce the contactless credit card, which allows holders to make small payments by swiping the plastic items over a card reader.
More than 20,000 retailers have installed the contactless pay points in their stores and, according to Visa, there are currently five million of these cards in use, reports the Guardian.
The two firms plan to launch a mobile phone with contactless technology, allowing consumers to make small payments using their hand-held phones.
The newspaper reports that Orange said the move will give consumers "a new level of control over their account", as they will be able to set daily or weekly category-based spending targets.
For example, users could identify a £50 a week limit on spending on food items. When the consumer neared this limit they would receive an SMS informing them that they are reaching their threshold.
Furthermore, a reward system will mean that Orange customers will earn a point for every £1 spent via the mobile phone network's credit card. These points will be redeemable in major high street stores.
Chris Wood, managing director at Barclaycard, said: "We are seeing demand from both retailers and customers for ever more convenient ways to pay and accept payment and believe mobile and contactless technologies are key to meeting those needs."
He added: "This announcement shows how, in partnership with Orange, Barclaycard is starting to make mobile contactless payments a step closer for UK consumers."
However, some consumers have raised fears that a contactless payment system could be more prone to fraud than over the counter payments.
Marc Overton, vice-president of wholesale, business development and partnerships, Orange UK, described the contactless payment system as a sign of things to come in the banking industry.
He explained: "A key part of our UK strategy is to grow and evolve our business, whilst at the same time provide extra value for our customers.
"In partnering with Barclaycard, we believe we're doing just that, and today's announcement is the next exciting step in the journey to the future world of consumers paying for everyday goods on their mobile phone."
According to research recently conducted by Barclaycard, credit card payments in the UK between December 19th and 31st last year increased by 2.4 per cent to £4.085 billion compared to the same period in 2008.
Meanwhile, Steve Perry, executive vice-president of Visa Europe, told the Times that the contactless payment system is "revolutionary" and a change as momentous as the introduction of internet payments five years ago.