Royal Bank of Scotland targets cash with contactless card technology

Royal Bank of Scotland targets cash with contactless card technology

Royal Bank of Scotland is to road-test MasterCard's PayPass contactless cards in the UK as an alternative to low-value cash payments.

The pilot trials, to be run in the Summer, will directly address the market for quick cash payments below €15.

The PayPass technology can be added to existing MasterCard EMV cards or issued as a stand-alone card. Currency specific, with a maximum transaction amount of €25 in the Eurozone, the programme works by allowing the cardholder to ‘tap’ (or ‘dip’ if required) their card at the point of sale and dispenses with the need for PINs or online authorisation.

Alexander Labak, president of MasterCard Europe, comments: "Low value transactions, where consumers traditionally rely on cash, are the next frontier for debit cards. By breaking cost barriers and creating a simple alternative to cash, we're creating a more attractive situation for banks, consumers and merchants."

Nearly 80% of all personal payments in Europe – or 180 billion transactions - are still cash based, while only six per cent are made by payment card, says Labak.
"Our research confirms there is huge potential for substitution of these 15 billion low value cash transactions," he adds. "Clearly a low value payment solution is required to help the players involved unlock this previously untapped opportunity - we’ve worked with European banks to find a win win for them, their cardholders and importantly merchants traditionally accepting cash."

By reducing the average costs associated with each transaction, contactless card payments can become profitable down to, and even below, five euros, he says.

Iain Clink, managing director, RBS Group Cards Business comments: "We believe that the use of the MasterCard PayPass contactless technology provides an exciting opportunity to address the low value payment needs of both consumers and retailers."

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