Lloyds TSB Bank PLC later this year will begin issuing Visa-branded contactless debit cards to its accountholders within the greater London area, the Scotland-based bank announced March 23.
Consumers will be able to use the contactless function of their EMV chip-and-PIN card for purchases up to £15 (US$25 or 17 euros) by tapping it on a terminal at the point of sale equipped to read the chip in the plastic. Consumers also do not need to enter their PIN, a Lloyds spokesperson tells PaymentsSource.
Lloyds this year expects to issue about 1 million contactless cards, which cardholders may use at more 50,000 contactless card readers in the United Kingdom. The bank will issue free replacement cards with the contactless technology to its accountholders by mail, the spokesperson says.
London recently has been at the forefront of contactless technology, as MBNA Europe Bank Ltd. and Barclaycard also have launched contactless card rollouts.
Barclays first introduced contactless payment cards in the UK in 2007 through its Barclaycard subsidiary. Since then it has issued more than 2 million contactless Barclays Visa debit and 4 million Barclaycard credit cards.
MBNA in October announced a two-year initiative to issue 5 million contactless credit cards in the UK (
Transport for London, the city’s transit operator, hopes by 2012 to make London the first city in where domestic and international consumers may access an entire transportation network using open-loop, network-branded contactless debit or credit cards (
Despite London-based issuer persistence at offering contactless payment options, consumers may not be so quick to adopt the payment type because there is no incentive to change payment behavior, Megan Bramlette, director of knowledge management at Auriemma Consulting Group, tells PaymentsSource.
Moreover, “the customers using contactless cards do not always have a good experience,” she says.
Consumers may spend more time making a purchase if the cashier has not been trained properly, or the consumer may get charged twice for the same purchase, Bramlette explains.
Lloyds TSB, however, is smart to distribute the cards in the greater London area because most UK merchants with contactless terminals are located in London, Bramlette notes.
“Consumers can not ignore contactless technology because it is an innovation within the payments industry,” she says. “But at the moment there is not a high adoption rate because there is no motivation for consumers.”
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