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MasterCard, Banco Posta Plan Italian PayPass Pilot

The project, planned to take place in Milan and Rome, will be the first European pilot involving RFID-enabled prepaid payment cards.
By Claire Swedberg
Participating area merchants will be able to add an RFID interrogator to their existing credit-card equipment or purchase a PayPass terminal incorporating an RFID interrogator and a mag-stripe reader. "In many cases," Pache says, "the existing terminal can be equipped with an RFID reader." The number of merchants participating in the program has yet to be determined.

Area restaurants, supermarkets, cinemas and convenience stores are among the merchants that will participate in the program. Users will tap a PayPass prepaid card near the interrogator, which will read the cardholder's account number encoded to the tag. The transaction should be automatically completed in about half a second, Pache says. In some cases, if the payment amount is more than €25 ($35.50), participants may have to input a PIN, just as they would for the mag-striped Postepay card. Just as they would with a mag-stripe prepaid Postepay card, users of PayPass prepaid cards will be able to recharge the cards by prepaying an additional amount at a Postamat ATM, the www.poste.it Web site or a Banco Posta branch.

According to Pache, more than 16 million MasterCard PayPass cards and other devices (such as key fobs) were in circulation in the second quarter of 2007, for use at over 55,000 sites worldwide, including stores, restaurants, vending machines, taxis, tollbooths and transit systems.

Other European countries where PayPass pilots are currently underway or have been recently completed include the United Kingdom, Turkey, Spain and Switzerland. In Turkey, a pilot was launched in June 2006 involving Garanti Bank and retailers in a portion of Istanbul. Most recently, MasterCard announced the forthcoming launch of a PayPass pilot in Spain, in cooperation with finance company Caja Madrid.

In May 2007, Visa announced plans for a major rollout of payWave RFID-enabled cards in Europe, beginning with a U.K. launch slated to begin this fall (see Visa Gives Its Contactless Payment Card Program a Global Push). U.K. banks also plan to roll out PayPass cards during that same timeframe.

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