Virgin Money to Roll Out Contactless Cards
A second credit card issuer in the United Kingdom, Virgin Money, has announced it will roll out contactless across its card base, joining Barclaycard.
Virgin Money, the financial services arm of UK-based Virgin Group, has announced that from Oct. 25, it would begin replacing its base of 2 million credit cards with cards supporting contactless. That would enable cardholders to tap their cards to pay for purchases of up to £15 (US$23.68) without having to insert the cards into readers and enter PIN codes. The cards would carry dual-interface chips, letting consumers to do conventional chip-and-PIN contact transactions for higher-value purchases. Virgin is expected to add the contactless functionality over the normal replacement cycle of the cards.
UPDATE: In addition, MBNA Europe, part of U.S.-based Bank of America, announced it would begin putting contactless functionality on its new and replacement credit cards, a "commitment" that it said would mean that more than 5 million MBNA-issued credit cards will support contactless technology in the United Kingdom by the end of 2011. END UPDATE.
Virgin Money and MBNA join Barclaycard and its parent, Barclays bank, in rolling out contactless. Barclaycard and Barclays have been the lone major issuers to fully embrace contactless since the technology was launched in the United Kingdom three years ago. Although contactless backers in the United Kingdom say that such other big British banks as The Royal Bank of Scotland, Lloyds and HSBC will be onboard with contactless, their rollout plans are unclear.
Virgin Money, in its announcement today, noted that three more merchants: Boots, a retail pharmacy chain; The Co-operative, a supermarket and separate pharmacy chain; and Little Chef, a roadside restaurant chain, would accept contactless payment in at least some of their stores. Virgin said contactless speeds up the check-out process at stores.
In an unusual move, Barclays issued its own press release welcoming the decision by competitor Virgin Money to roll out contactless.
Barclays noted that there are now more than 10 million credit and debit cards in circulation in the United Kingdom, of which Barclays and Barclaycard account for 80%. And as of the end of August, there were 27,000 contactless terminals in UK stores, of which Barclaycard, the bank’s merchant acquiring arm, had supplied 26,000. At present there are more than 30,000 contactless terminals nationwide, said the bank.
Between January and August of 2010, the Barclaycard acquiring business showed an 188% increase in monthly contactless transactions, said the bank, though it did not release actual transaction figures.
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