Major New Bank Joins UK Contactless and NFC Landscape

Lloyds Banking Group, which bills itself as the United Kingdom’s largest retail bank, is beginning to make its move into contactless and NFC payment.

Lloyds’ TSB banking unit announced this week it would issue a Visa payment application for a promotional “Olympics Phone,” which Visa and fellow Olympics sponsor Samsung Electronics plan to hand out to athletes at next year’s games in London. Lloyds TSB plans a commercial launch of NFC payment by the end of this year, according to a spokeswoman.

The bank in March announced it would begin its rollout of contactless debit cards to customers in and around London and expects to have 1 million on issue by the end of 2011.

“It’s something we are looking to move with this year and next year,” the spokeswoman told NFC Times, speaking of NFC mobile and contactless-card payment.

She had few details about the planned NFC mobile-payment launch, however, including which mobile operators would be involved. She confirmed the application on the phones would be prepaid and probably branded Visa. TSB bank has already launched an internal NFC trial of prepaid payment.

The NFC commercial launch would be different from Olympics phone project, which Visa and Samsung announced in late March.

They said they will introduce the unnamed phone model in the run-up to the games starting in July of 2012. The handsets will support a Visa payWave payment application on SIM cards. But Visa and Samsung, the handset maker, have not announced any mobile operators as partners.

The Olympics sponsors said they plan to introduce the phone first in the United Kingdom, then elsewhere. But they have released few other details about the phone, including how they will brand it. A photo Visa released as a mock-up shows a "Visa Mobile" screen on what appears to be an earlier Samsung NFC phone.

Lloyds’ backing for both contactless cards and NFC is a big boost for the UK contactless rollout, which had been carried for more than three years by a single bank, Barclays, and its credit card arm Barclaycard. Together Barclays and Barclaycard have issued more than 11 million contactless cards.

Barclaycard's acquiring arm is responsible for a large share of terminals in merchant locations that accept contactless. According to Visa, 60,000 merchant outlets accept contactless payment in and around London. About 8,000 London buses will also take contactless payment from bank cards by the time the Olympics rolls around.

Bank of America's card unit MBNA and Virgin Money also have announced contactless-card rollouts for the United Kingdom. Lloyds’ Halifax unit earlier issued some contactless cards as has the Royal Bank of Scotland, though not as part of rollouts.

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