Card that could kill off loose change

By SEAN POULTER, CONSUMER AFFAIRS EDITOR
Updated: 03:31 EST, 4 September 2007

The days of rummaging in your pockets or handbag for coins to buy a coffee or a newspaper could be numbered.

The cashless society comes one step closer today as MasterCard launches a new generation of 'Tap & Go' cards, which allow users to buy items costing less than £10 simply by touching a chip card against a reader.

Banks such as HSBC and retailers including McDonald's and Coffee Republic have already signed up to use the MasterCard system, which is called PayPass.

It is being launched in selected parts of London today, before being extended across the whole capital this month. The rest of the UK will follow next year. It is estimated that 5m of the cards will be issued by the end of next year and these will be accepted by 100,000 retailers.

PayPass works in a similar way to the Oyster cards used on London Transport. But instead of needing to be topped up with credit at a terminal, the cards allow money to be deducted from the user's bank account or added to their credit card bill.

The cards should cut queues in fast-food outlets, coffee shops and newsagents, MasterCard says. Its own research found that 53% of consumers were enthusiastic about the cards' convenience and speed.

As many as 16% said they often did not buy everyday items such as newspapers or sweets because they did not have change or did not want to break into a note. A rival 'contactless' card, the Barclaycard One Pulse, is also on the way.