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Poland and Italy commit to contactless payments

The move to contactless cards and NFC-compatible point-of-sale terminals is gathering pace with banks in Italy and Poland announcing plans for widespread contactless card deployments this year.

PKO/Intesa Sanpaolo
WAVE HELLO: Major banks in Poland and Italy are shifting to contactless technology in 2010

Poland and Italy have become the latest countries to begin a significant drive towards contactless cards and NFC-compatible point-of-sale terminals.

In Poland, PKO Bank Polski, the country’s largest debit card issuer, is spearheading the move with the announcement that it will begin replacing all its 6.5m debit cards with contactless Visa PayWave cards from mid-2010.

“We believe that placing on the market in a relatively short period of time more than six million microprocessor cards with Visa PayWave functionality will significantly accelerate the development of proximity payments in Poland,” says Zbigniew Jagiello, president of the board of PKO Bank Polski. “This will be a milestone in the process of moving away from cash transactions, which will change the payment habits of the Poles.”

In Italy, Intesa Sanpaolo, Italy’s largest banking group with 11 million customers, has become the first bank to commit to a large-scale roll out of contactless technology. The project, run in collaboration with MasterCard and Gemalto, will roll out first in the Milan area and will then be gradually expanded nationwide.

“Eleven brands of national or European relevance with a presence in Italy’s major cities, spanning from fast food restaurants and supermarkets to sports and home improvement stores, will provide acceptance points,” says the official announcement. “Hundreds of smaller merchants are also expected to join in the program as it unfolds.”

The move to contactless is not going so smoothly in the US, however. Best Buy, the 1,023-outlet consumer electronics retailer, has gone so far as to remove the terminals that it had already installed in a row over transaction fees. According to retail technology blog StorefrontBacktalk:

“After several discussions with Visa produced no agreeable changes,” the chain started removing its acceptance of Visa contactless cards in October, completing the cutoff in November, said one Best Buy executive involved in the decision. The cutoff happened store by store along with POS upgrades.

“Our decision was based on the costs associated with requiring contactless debit transactions be processed as signature debit,” the Best Buy executive said.

In the UK, meanwhile, the conversion seems to be going more easily, with the number of contactless debit cards in circulation expected to double to 10m this year. Presenting Visa Europe’s annual results, chief executive Peter Ayliffe described 2010 as “the tipping point” where the British consumer finally adopts the new technology, according to a report in The Telegraph:

“A number of banks want to issue contactless cards in the UK this year. We’re also seeing it across Europe,” he said.

If the roll-out is a success, Visa hopes to move contactless technology off cards and into mobile phones. Mr Ayliffe said: “This year is important as it gets the infrastructure in place for mobile payments.”

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