While the credit card industry has spent billions of pounds developing and introducing Chip and Pin technology, why have Mastercard now decided to introduce the so called PayPass technology into the UK, for transactions under £10?

The PayPass system operates in a similar way to the Oyster system which is used on the London Underground, whereby the consumer simply passes their card across a reader and the funds are taken from their account - no Pin number, all automatic.  While the system has the potential to have a major impact on reducing queues in a number of retail outlets, there is also the potential for fraud.  

The operators of the system admit that while the system is only available for individual purchases up to £10 in value, there will be no security checks at all until the £50 level has been reached in quick fire accumulated purchases - at this point the user will need to input their PIN number.  While the £10 limit does offer some limitations for fraudulent activity, the £50 security barrier is a little higher than many feel comfortable with.

The system itself is used in 19 other countries across the world, and the technology currently has a client base in the region of 16 million.  Many are now questioning why the industry spent so much money developing Chip and Pin in the UK, only to revert to PayPass for smaller purchases? 

Initial research has shown that it may take some time for the UK consumer to actually accept the system - a consumer who over the last 10 years has been constantly reminded of the need for security!