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Wave and pay - the future of credit cards

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Cash could soon become history as cashless payments hit London shops this month following the launch of two new payment cards. Over 1,000 shops, restaurants and cafes including EAT, Krispy Kreme, Coffee Republic, Threshers, YO! Sushi and Books Etc have signed up to Barclaycard's touch-and-pay One Pulse card. To pay for purchases under £10 - such as coffee, snacks and books - customers simply hold the card up to a special reader which deducts the money for the purchase automatically.

The new card has three main functions:

  • To make paying for purchases under £10 easier, with no PIN or signature required.
  • To use as an Oyster card on London transport.
  • To be used as a standard credit card to pay for larger (over £10) purchases.

"We are excited about installing cashless readers in 25 of our London stores," says Guy Harvey, financial director at sandwich chain EAT, "It will help us to eliminate some of the frustrations for our customers, such as queues in the busy lunchtime rush."

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London is your Oyster...

Commuters and other cardholders travelling in and around London can add an Oyster card to their OnePulse credit card, either as pay-as-you-go or as a season ticket. An Oyster is a 'smartcard' which can store £90 of pay-as-you-go credit plus a travelcard or annual bus pass. It can be used on tubes, buses, DLR, trams and some national rail services in London and works out cheaper for single journeys than buying a ticket each time. If you do more than one journey in a day, the card calculates the cheapest fair for your route. Oyster is hosted on the OnePulse card but is entirely separate from your credit card account.

Barclaycard OnePulse cardholders will also be able to use the card as a normal credit card for purchases over £10. Barclaycard chief marketing officer Elizabeth Chambers says, "We believe Barclaycard OnePulse is the future of payments in London and hope as many Londoners as possible enjoy the benefits when it is rolled out in the autumn."

Touch and go for competition

Meanwhile Mastercard has launched the PayPass system in London ahead of a UK rollout, saying it will cut queues and the need to carry cash. The credit card is already used in 19 countries, including the US, which is the biggest, and has 16 million users overall.

Users pay for their goods by touching the card on a reader and the money is then deducted from their bank account or added to their credit card bill. There is no need to enter a pin or sign your name. Banks such as HSBC and retailers including McDonald's and Coffee Republic have already signed up to use the MasterCard system.

The card was launched in selected parts of London at the beginning of the month and will be extended across the whole capital by the end of September. The rest of the UK will follow next year. It is estimated that five million of Paypass credit cards will be issued by end-2008 and these will be accepted by 100,000 retailers.

12 September 2007 © Moneyextra.com

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