I have always been interested in new technology so I thought this deserved a blog post. Finextra, a great independent source of news on financial technology, reports that later this year Boots in the UK will trial a new 'contactless' payments system in 15 London stores and 6 Liverpool stores. This technology trial involves a partnership between Boots, MasterCard and RBS WorldPay.

The contactless payments technology will allow Boots customers with MasterCard PayPass cards to make payments of under £10 by tapping their MasterCard PayPass card against the contactless payments terminal. The US MasterCard web site has a page explaining how to "tap" and shows the PayPass Readers and Devices. It is interesting how they are calling the technology "contactless" when you have to tap your card against the terminal :)

Boots and RBS WorldPay will not be the first companies to adopt contactless payment technology. Visa have a competing version of the MasterCard PayPass called payWave which works in a similar manner to PayPass. Barclaycard has been using the Visa payWave technology for some time now. In 2007 they launched a three-in-one card that allowed standard chip and PIN credit card facility, contactless payments up to the value of £10 and Oyster card.

Late last year MasterCard announced that they had issued their 50 millionth PayPass device. A device could be a PayPass card, a mobile phone, a key chain fob, a wrist watch or similar device. They claim to have over 141,000 merchant locations around the world. So it looks like contactless payments are here to stay.

This leads me to some questions -

• Does anyone know if this technology is available in Ireland?
• Would you use it if it was available?
• What do you think of the security risks associated with this technology?

Personally I like the idea and would use it daily if it was available. It would encourage card usage for small purchases and speed up the process. I know McDonalds recently started accepting credit cards in their Irish restaurants and have a chip and pin terminal at paypoint. I would see this technology as the next step for organisations like McDonalds.

With regards security it seems to be a bit of a grey area at the moment. Mastercard say:

• There is Zero Liability protection with PayPass.
• There will not be any accidental payments as you must be extremely close to the reader for it to work.
• You cannot get billed twice even if you tap more than once at checkout.

Visa say it is just as secure as chip and PIN and there is less chance of fraud as the card never leaves your hand. I'm not sure I fully agree with this statement!

Dave

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