Consumer Jitters Aside, U.K. Merchants Ready for Contactless Payments

Smith acknowledges that banks have released their cards under a variety of names, and that this might have caused some confusion, but adds, "We have started with a common foundation, which is the technology." All contactless-card deployments, he says, are compatible with the various contactless devices installed at U.K. merchant locations. What's more, all Visa contactless devices and cards are marked with a logo depicting four wavy lines (signifying radio waves) to indicate contactless capabilities.

Outside of the United Kingdom, Smith says, "Europe is catching up fast. Individual markets will move at their own speed." He sees Turkey, France and Italy as some of the fastest-adopting countries.

Visa Europe has centered its U.K. deployments around fast-food and other high-volume establishments, including coffee bars, dry cleaners and convenience stores, in the city's high-traffic locations, such as near metro stations.

"Within the next year," Smith says, "we will see a significant increase in the use of contactless technology in debit and credit cards." He adds that he expects to see additional merchants using the technology. Visa Europe is presently working with merchants, he says, to alleviate consumer concerns that the use of contactless technology will lead to greater credit card debt. That means promotions, he notes, and improved education through merchants as to how consumers might better control their expenditures being made electronically, due to a spending trail that would not be available if they used cash.

Consumers in Europe and elsewhere are also expected to begin making contactless payments by means of cell phones equipped with Near Field Communication (NFC) RFID technology. A study recently published by Juniper Research predicts that by 2013, consumers worldwide will utilize NFC-enabled mobile phone payments to make low-value purchases totaling $75 billion per year.

With Japan already deploying NFC phones, Europe, North America and parts of Asia are predicted to follow closely behind. According to the study, phone providers will begin selling their products with NFC chips beginning in 2010, with about 20 percent of all new mobile phones expected to be NFC-enabled by 2013.