Ireland falling out of touch when it comes to 'contactless' smart cards

AS CONTACTLESS smart card technology goes mainstream across Europe a number of issues - not least a lack of movement from some key players - means Ireland continues to lag behind.

When an integrated ticketing system is finally rolled out across Dublin's public transport network next year it will not mark the debut of contactless card technology in Ireland. On the contrary a smart card system has been in operation in the capital since 2005, when one was introduced on the Luas network.

Contactless cards have become even more everyday in the workplace, replacing swipe cards as a means of employee authorisation in many offices.

Put simply the technology allows users to make numerous types of transaction and interaction by tapping a card off a receiver. The chip inside the card wirelessly registers the action, meaning they do not need to be scanned, swiped or stamped like traditional cards or - in the case of the Luas - tickets.

In 2008 Dublin Bus began to roll out an equivalent system to the Luas's and more recently Irish Rail has followed suit with a limited offering. It will be a few more months until the dots are joined between these three, however.

"One of the problems has been the propriety control of the clever stuff by companies," said Tim Gaston, director of the integrated ticketing project at the Railway Procurement Agency (RPA).

"Anywhere we went with an existing system said do not get yourself into a situation where you're beholden to one company."

Gaston cited London's Oyster system as an example of this. That network utilised propriety technology which meant Transport for London (TFL) had only one option when looking for a company to install new machines in stations. In the end TFL bought themselves out of this contract.

However, in most other ways a comparison with London is far less flattering to Ireland's attempts at integrated ticketing. Oyster was launched in 2003 and has been a massive success since then, with 80 per cent of all Tube journeys made using the system.

Irish people seem no less open to the technology: one-third of all Dublin Bus journeys are already made using contactless cards.

Transport is seen by many as a "killer app" that will make contactless cards mainstream. It is quicker, cheaper and potentially more information-rich than the cash alternative making it beneficial to users on both sides of the transaction. However, the technology has a huge variety of applications beyond this with it already being used internationally by stadiums for season ticket holders, restaurants for order tracking and merchants for loyalty card systems.

AIB Merchant Services, which operates the majority of in-shop card terminals in Ireland, recently struck a deal with Zapa Technologies to roll out a contactless loyalty card system for independent retailers. This, it is hoped, will have the added benefit of preparing shops and customers for the eventual arrival of contactless payment methods.

"Our infrastructure is kind of a first step towards a contactless- based transaction," said Chris Mason, managing director of AIB Merchant Services. "The merchants will have that technology in their shop . . . and it will future-proof them."

However, as it stands no Irish bank is showing any sign of introducing a contactless version of its credit or debit card. At best, Mason can only point to talks with his company's 50 per cent shareholder AIB as a sign that it is on their radar if not their agenda.

Tim Gaston suggests this lack of movement from banks is holding the technology back from mass-adoption here.

"If you look at what is happening in the Far East they are adamant it will be contactless banking that will take off," he said. "The reason it hasn't taken off in Ireland is that the banks have shown no interest in it," he said.

Again this differs significantly from what is happening in Britain. There Barclays has spearheaded a shift to contactless cards, making the technology standard in all new and reissued credit and debit cards since last year. By the end of 2010 it is expected to have issued up to 12 million contactless-ready cards to its customers.

According to Lewis Nolan, vice-president of contactless business development at Visa Europe, the move has been complemented by the rapid introduction of contactless points of sale and the support of big-name brands.

"As we're getting the cards out and more places where they can be used we're seeing more usage, from a relatively low base," he said. "It's predominantly been Barclays leading this but more issuers are joining towards the end of this year."

Britain is ahead in this area but many are following quickly behind. Visa has already worked with banks in Italy and France to introduce contactless technology to big cities there. It has also launched the cards in the less likely locales of Turkey and Poland.

"Turkey's got a very young market, very tech savvy, and banks like to compete on technology," said Nolan. "Poland is coming from an even less sophisticated base, in many cases they're putting terminals in for the first time but they're with contactless so you've got a quicker route to market."

Nolan said such a rollout is to some degree chicken and egg, but the onus is on the banks to push things. What seems to be required is a bold leap by some key player, akin to Barclays' move in Britain, but none are forthcoming here at present.

According to Chris Mason, with the Government so keen to move away from a cash-based society, an incentive from them might be enough to grease the wheels into motion. However, he accepts that it is unlikely to be top of the agenda right now.

What he does see as perhaps the more realistic catalyst for progress is the mobile phone, that ever-present and increasingly powerful part of people's daily lives.

"If Dublin Bus had a phone application someone could preload that and that could conceivably be tapped on the payment device on the bus," he said. "You can load thousands of apps onto an iPhone today so I see no reason why you couldn't bring all those applications together onto a phone.

"That would be the only I see it really working in a unified way."

Indeed the phone could well become a holy grail device for contactless technology in Ireland, managing payments, transport without adding anything at all to the pocket. The problem is very few phones have the right chip built into them at the moment and it would take a cross-industry push for that to change.

However, the idea of a multipurpose card is not dependant on phones becoming contactless conduits.

Indeed, as the RPA starts its rollout of an integrated ticketing system here, TFL will begin to make the Oyster system redundant in London. From next year customers will be able to pay onto buses and trains directly with their contactless credit or debit cards, cutting out the need for an integrated system in between.

With Irish banks showing no sign of embracing the technology, such a seamless set-up must remain a pipe dream here for now.