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UK supermarket starts contactless payments

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Spar is going contactless, attracted by the four pence per transaction the company could save by not asking shoppers for their PINs.

The supermarket chain will roll out contactless payment kit to its 2600 stores over the next couple of years at a cost of £700,000, which it intends to recoup from the lower transaction fees that the card companies levy on contactless transactions, NFC Times reports.

Visa, for example, charges as little as a penny for a transaction worth under £2 if it's completed wirelessly. Less than a tenner and the cost is only 4p, compared to 8p for a chip and pin-secured transaction.

That saving isn't direct to the retailer, which works though a bank, but Spar thinks it can save 40 per cent on its transaction costs by going wireless.

The credit card companies are of course hoping wireless will replace cash transactions, rather than chip and pin. That's fine with Spar, which reckons that two per cent of every cash transaction goes into handling the money. So if someone is spending £2 then it's cheaper to take a wireless card - and there's all that tasty demographic profiling card payments enable.

Not that many people have wireless cards just yet, despite Barclays aggressively pushing wireless connectivity into all their cards. Someone has to take the plunge on contactless payments - and Spar looks set to do so.

Security isn't as much of an issue as people often think – transactions are pegged below £15 and users are asked for their PIN at random (based on usage patterns) so the capacity for fraud is minimal.

Given that the technology reduces costs for everyone (presumably at the expense of those driving all that cash around) there seems little reason not to look forward to contactless payments. Just don't hold your breath unless you do a lot of shopping at Spar. ®

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