Contactless MasterCards coming soon

As a regular user of Transport for London's Oystercard smart card system - which saves a lot of time and trouble on the tube, I can tell you - I was intrigued to hear that MasterCard is planning a similar system for its credit cards around the globe.

The MasterCard system - to be known as PayPass - will initially be offered to credit card users in the Far East, notably Malaysia and Brunei.

The PayPass system will allow users to tap their cards on the terminal in question, and then enter their PIN. For smaller value transactions, there are even plans to simply tap the card on the terminal, and that's it.

I must confess that I'm not too keen on this latter option, as it's about as secure as the Oystercard system on the tube or bus, but I gather that that PIN-less Paypass transactions are designed as a direct alternative to paying by cash for newspapers, magazines, ciggies and the like.

Interestingly, MasterCard claims that trials of the PayPass system in the US, Philippines, Taiwan and Japan, have been a success, mainly because they have helped increase sales of participating merchants.

The gameplan is to phase in PayPass globally over the next few years, with merchants adding a special reader pad to their transaction terminals.

MasterCard says that cardholders will have the option of applying for a new PayPass-enabled card or convert their existing payment cards to PayPass.

I think I'll go for an extra card as it's the safer option, even though MasterCard says that users can cap the value of each transaction to avoid abuse if the card is lost or to control their personal finances...