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In perhaps the first payment project of its kind, about 350 street vendors who hawk The Evening Standard newspaper outside London Underground stations began accepting the contactless "Eros" prepaid payment and loyalty card last September. Now the newspaper has expanded acceptance to contactless banking cards that use either the Visa payWave or MasterCard PayPass applications, says Michael Halstead, managing director of United Kingdom-based consulting firm HH&S Group, which is working on the Eros project for the newspaper. The newspaper vendors have been able to accept payWave and PassPass since 10 June, although these types of transactions remain rare, says Halstead. Among the banks issuing contactless cards are Barclays PLC through its Barclaycard issuing arm. When the newspaper began equipping vendors with mobile point-of-sale terminals to accept the closed-loop Eros card, it also made sure the terminals could read payWave and PayPass, Halstead says, though that feature was only activated last month. "We were told by Visa, MasterCard and Barclays it (contactless payment) was going to be ballistic," he tells CardLine Global sister publication Cards&Payments. "We don't want to have to go back to (re-equip) the terminals." Contactless banking cards and terminals have rolled out more slowly in the UK than many observers expected since launching last fall, however, with only 340,000 cards in circulation and about 5,000 merchant locations as of the end of May. But backers say they expect some big merchant chains to eventually sign on to accept contactless. That should help spur issuance. Meanwhile, The Evening Standard has had some success with Eros. Although Halstead declines to release card figures, he says 5% of newspaper sales come from the card, which gives users significant discounts on the cover price along with other offers. Cardholders register on the Internet and can reload the card online via a credit or bank account. The details Eros cardholders supply go into a database the newspaper uses to send the cardholders offers and rewards to keep them loyal. Halstead says. That is the real value of Eros, he says. When consumers tap to pay with a payWave or PayPass card, they remain anonymous, he notes. So why equip the Eros terminals to also accept contactless banking cards? "At the end of the day, I've got to sell newspapers," he says. A source tells Cards&Payments the newspaper is working with MasterCard Worldwide to put a separate Eros application onto a prepaid PayPass card, which would enable The Evening Standard to know the identity of customers paying with the card.

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