UK branding agency Nucleus has appointed investment bank Rothschild to raise £15 million to fund a contactless payment system to rival Transport for London's (TfL) Oyster smart card, according to a report by UK broadsheet The Daily Telegraph.
But the new card, to be called sQuid, will not be used to pay for journeys, but to pay for low-value cash transactions.
The move to the launch the sQuid card follows TfL's failure to reach agreement with technical and financial partners to add contactless payments functionality to its Oyster smart card.
TfL said last July that it was holding discussions with a number of firms to provide and integrate the technology for the new e-money system, including Barclays Bank, Royal Bank of Scotland and Paypal. But earlier this month the company said the ideas and models put forward had been too complex and it has not seen a system acceptable to retailers.
But according to the Daily Telegraph report, Nucleus believes that the technical issues can be resolved and that a partner can be found to take on some of the risk.
A spokesman for the company told reporters that sQuid would be launched in the first quarter of 2007, deploying existing technologies including the "touch and go" system currently used by Oyster.