MBNA Europe Bank Ltd. will be issuing some 5 million contactless credit cards to its customers in the United Kingdom as part of a two-year initiative the Bank of America Corp. subsidiary announced on Oct. 29.
A BofA representative declined to comment on the rollout, which will involve cards carrying both the Visa and MasterCard brands. Consumers who use the contactless feature may make purchases of up to £15 (US$24 or 17 euros) without having to use their PIN.
MBNA wants to “support the evolution of contactless technology in the UK,” Ian O’Doherty, Europe card executive for Bank of America, said in the release.
In a recent MBNA survey of more than 1,000 UK credit cardholders, 80% of respondents said contactless cards would help reduce how long they wait in lines, and 69% said the technology would make their lives easier, according to MBNA.
Some 25 million contactless credit and debit cards will be on issue in the UK by 2012, MBNA believes. Visa Europe alone believes its brand will appear on 12 million UK cards by the end of the year (
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.
Some 26,000 merchants accept contactless payments in the UK, according to Visa Europe, including Subway restaurants, Pret A Manger restaurants, Ikea Systems BV stores and several independent convenience stores.
It seems logical that large UK issuers, such as MBNA, are launching contactless programs because Barclaycard already has distributed both contactless debit and credit cards, Matt Simester, director of Auriemma Consulting Group in the UK, tells PaymentsSource.
Plus the barriers for card issuers no longer are consumer-focused because most consumers have readily taken to the technology, Simester notes. The focus now should be on merchant acceptance, he says.
As more merchants accept contactless cards, issuers will be able to learn more about the type of fraud associated with the technology, Simester notes. Already the industry is beginning to understand the fraud risks, having generally raised the limit for not requiring PINs to £15 pounds from £10, he adds.
“I believe that by 2015, all credit cards in the UK will be contactless-enabled,” Simester predicts.
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