The rollout will initially be focused on selected London postcodes, before being extended to the rest of the UK. Industry estimates suggest that more than five million contactless cards will be issued by the end of 2008 and that they will be accepted by at least 100,000 merchants.
The faster transactions are processed through the same payment network used for Chip and PIN, meaning retailers are protected against fraud in the same way. Upgraded credit and debit cards will carry a ripple logo and participating businesses will be recognised by an acceptance logo.
Banks planning on participating in the first phase of the rollout include Barclaycard, Bank of Scotland, HSBC, RBSC and HSBC. Barclaycard carried out trials of the new system in its Northampton office and Canary Wharf HQ.
Barclaycard Business sales and marketing director Tim Carlier said: "The rollout of this new way of accepting card payments is an exciting step for us and our customers. It's important that retailers, especially those in London, are ready to accept this new technology. We expect to deploy thousands of terminals this year and this number will significantly increase during 2008 and beyond as the technology spreads across the UK."
Retailers interested in becoming contactless ready in 2007 can contact Marc Pettican on 07764 660939, or Michelle Tompkins on 07967 638567.