Three Spanish banks have announced major commitments to equipping retailers with contactless POS terminals.

In Barcelona, La Caixa is to equip 17,000 points-of-sale and 500 ATMs to accept contactless transactions and to issue one million customers with contactless cards. In Madrid, bankers BBVA and Bankia are working together to launch ‘Madrid Contactless’, a project designed to equip Madrid’s high traffic retailers with contactless POS terminals. In both cities, the contactless terminals being deployed support NFC as well as contactless and allow customers to make purchases of up to €20 (US$25) without entering a PIN.

The Barcelona rollout will see all La Caixa points of sale and all cardholders in the city converted to contactless technology, beginning this month. The new cards will be sent out to 50% of La Caixa’s customers in Barcelona by the end of February and deployment will be complete by the end of the second quarter of this year. At least one ATM at each of the bank’s Barcelona branches will also be equipped to handle contactless transactions by the end of 2012.

All three banks are collaborating on the project with Visa Europe, which says it “sees this deployment as an essential step for mass adoption of mobile payments in Spain”.

In the first phase of the Madrid project, BBVA and Bankia will install 7,000 contactless POS terminals in stores that have a high percentage of low-value transactions, such as fast food outlets, bars, cafes and restaurants. All the stores are located within Madrid’s M-30 inner ring road and reach one million shoppers a year. A second phase, due to be completed during 2012, will see the project expanded to additional areas of Madrid with the aim of reaching a total of two million retail customers.

Bankia and BBVA say they have begun by focusing on the use of contactless cards, rather than NFC, because customers are currently more accustomed to using cards for payments. By taking this approach, they explain, retailers will already be equipped to accept NFC mobile payments once NFC phones become more widely available.

“The aim of this new initiative is to create a nationally and internationally interoperable ‘contactless ecosystem’, to increase knowledge and awareness of the advantages of this technology,” say the banks. Madrid Contactless will “increase opportunities for Visa cardholders using contactless cards or mobile phones to make contactless payments at different stores and sectors of the area, whatever their issuing financial institution.”

“The collaboration between BBVA and Bankia is necessary to ensure that a high penetration among citizens is achieved in a short time,” the partners add.

Next: Visit the NFCW Expo to find new suppliers and solutions