Transport for London (TfL) has abandoned initial plans to add contactless payments functionality to its Oyster smart card after failing to agree terms with technical and financial partners.
TfL said in March last year that it was looking to add new payments functions to the pre-pay Oyster card to enable customers in the capital to use the contactless transit passes to pay for low-value purchases at retail stores.
In July TfL 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 as well as three separate consortia comprising BBVA/Accenture/MTR/Octopus, EDS/JPMorgan and Nucleus/Dexit/Ericsson/Hutchison 3G/Euroconex.
The company was expected to confirm a partner by the end of 2005 with trials of the scheme expected to take place earlier this year.
But TfL says the ideas and models put forward so far have been too complex and it has not received an acceptable blueprint that would make the system acceptable to retailers.
Will Judge, director of the e-money project, told FT reporters that while there is clear demand for a contactless e-purse, the difficulty is building a system that is lower-cost than the current credit card systems.
Commercial consideration are also understood to have been a sticking point, with project partners unable to agree a revenue-sharing deal.
Despite the setbacks, TfL has said it is still interested in adding e-payments functionality to the Oyster card in the future.
Judge says there are several models based on the idea that organisations could co-operate by putting two or more applications on a single card, for example Oyster could sit alongside a payment application like a chip and pin credit card.