The Co-operative Food division is to become the first major grocery retailer in the UK to introduce contactless card payment in its stores nationwide after joining forces with Barclaycard and Visa to pilot the technology at 100 stores next year. Visa’s PayWave system will be used on the Barclaycard-administered scheme, which it is hoped will reduced cash handling costs for all concerned and improve throughput at the shops.

If the pilot scheme is deemed a success next year then the Co-operative Food division says it will rollout the contactless card payment terminals and associated technology across the majority of its UK shops in time for the 2012 Olympics in London, which is being billed as a contactless event, where visitors are expected to experience the full convenience of contactless payment on transport, tickets and other low value purchases.

Contactless payment allows customers to make purchases of £15 or less, without the need to enter a PIN or insert their card into a payment terminal. Once the card has been held over the contactless terminal, the secure transaction uses the tried and tested Chip and PIN technology to automatically add the purchase to the customer’s credit card bill or debit it from their current account, reducing cash handling and management costs for banks and end users, while also offering the former a small percentage in fees. UK rollout of the technology began in 2007 and there are now more than nine million contactless-enabled cards in circulation and thousands of payment terminals. Nationwide usage figures are not, however, available and it is way too soon to be predicting the death of cash just yet.

Commenting on the rollout, Stuart Neal, head of UK payment acceptance at Barclaycard, said: “We’re absolutely delighted that the Co-operative Food is joining forces with Barclaycard to roll out contactless payments across all of its stores. For a household name such as the Co-operative to commit to the technology really shows that it is the future of payments, and we are looking forward to working with them to further enhance the in-store experience for their customers.”

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