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MasterCard Worldwide announced today it is working with large Middle Eastern acquirer Network International to install PayPass terminals in 1,000 stores in the United Arab Emirates, including in coffee shops, fast-food restaurants, family diners, cinemas, general retailers and convenience stores.

The expansion of contactless point-of-sale terminals helps set the stage for NFC rollouts by the country’s two mobile operators, Etisalat and du. Both are gearing up for launches of mobile-payment and other applications.

With PayPass, consumers could tap cards and, later, NFC phones, to pay for purchases of less than 100 Emirati dirhams (US$27.22) without entering a PIN or to sign for the transaction. Contactless acceptance points have been limited in the UAE to date.

MasterCard said four UAE banks are mainly issuing PayPass cards, Dubai First, Mashreq Bank, Emirates National Bank of Dubai and Abu Dhabi Commercial Bank, and the payment network is trying to drum up support in other Middle Eastern countries, including Qatar and Lebanon.

MasterCard’s announcement comes a couple of days after du said it would introduce transit fare payment, working with local transport authority RTA. Etisalat is also expected to offer the fare-collection service on NFC phones with RTA. 

Both telcos made mobile-payment announcements at the annual GITEX computer and electronics trade show going on this week in Dubai. And RTA also reportedly said at GITEX that the NFC-enabled fare collection service would be officially launched in mid-2013.

Besides payment and ticketing, Etisalat has been involved in negotiations with the Emirates Identity Authority to put the country’s national ID card on NFC phones.