The pilot will be held at Visa Europe's staff restaurant in central London where employees will be able to use the contactless Visa debit and credit cards to pay for low value purchases of £10 or less.

The bank is using cards developed by Oberthur Card Systems for the pilot, while specially-equipped point-of-sale terminals developed by Ingenico have been installed in the restaurant.

Sandra Alzetta, SVP, Visa Europe, says contactless payment cards will offer customers the perfect alternative to cash with the added benefit that the technology will sit on their existing debit and credit cards.

Darren Wilson, head of card acquiring, HSBC, says the partnership with Visa, Oberthur Card Systems and Ingenico "provides all parties with increased confidence and experience of contactless payments in the run up to the London Launch later in 2007".

HSBC is one of a number of banks that are participating in the first phase of a national roll out of contactless payment cards in the UK, which will start with a London launch in select areas involving a mix of retailers and selected cardholders.

Earlier this month UK payments association Apacs said industry estimates suggest that over five million contactless cards will be issued by the end of 2008, and that they will be accepted in at least 100,000 merchants across the country.

Barclaycard has said it will begin rolling out a contactless payment card featuring Transport for London's Oyster pre-paid fare system to customers in September. The combined card features Visa's 'wave and pay' contactless payment technology, and will be used for low-value transactions.