Barclays heralds new wave of wallet-waving
Contactless tech going in cards - data-gathering to follow
Barclays Bank is to embed contactless technology into every debit card issued from this day forward, allowing punters to pay for coffee with a wave of the wallet - providing they can find somewhere that accepts the new technology.
Barclays has had a contactless card for a while now; the OnePulse, which also has an Oyster card embedded for use on the London underground. But that was only available to Londoners for obvious reasons. Now everyone with a debit card is going to be wirelessly enabled, next time their card is replaced, which the companies involved hope will kickstart the wireless-payments industry.
The system is based on Visa's payWave system, which is compatible with Mastercard's PayPass, and processes transactions of up to a tenner by waving the card near the reader. Every now and then, at random or in response to unusual behaviour, the user will have to put the card in a normal reader and enter their PIN in the existing manner.
The security mechanisms employed are challenge/response, and subject to the usual concerns about interception and transaction replication. The communication protocol used by both Visa and Mastercard conforms to the EMV specification, though the kernel and encryption systems are kept secret - a strategy which rarely works out for the best, though given the £10 transaction cap and the ability to fall back on the PIN the security issues would seem minimal.
However, while most debit-card transactions are performed online, so the customer's bank balance is checked before the transaction is authorised, PayWave transactions always take place offline, which will no doubt delight students everywhere - especially as the pubs start accepting them.
More concerning is the ability of the banks to collect usage information about all those cash transactions; they'll know where you drink coffee, what paper you read and how much you spend on cigarettes. It will make for almost as much data as the supermarkets are already collecting through your loyalty card.
Merchants apparently gain from faster transaction times, and thus shorter queues, though given that debit cards normally charge a minimum fee for each transaction they would seem ill-suited to a large number of small transactions. We put that point to Barclays, who pointed us to Barclaycard as they are handling negotiations with merchants, and we are still awaiting comment on the matter from them. ®