Can Barclaycard succeed where Google has failed with PayTag?

Apr 19, 2012
Tim Edwards

Stick-on contactless credit card is a jerry-rigged alternative to Google Wallet

CREDIT card provider Barclaycard is looking to succeed where the mighty Google has so far failed with the imminent launch of PayTag, a new mini stick-on contactless credit card, designed to be attached to users' smartphones.

Contactless payment cards, which allow users to pay for items up to £15 without entering a PIN number, have been around for some years now. Barclays, Lloyds and NatWest are among the banks that have already issued them to their customers.

Barclaycard PayTag appears to be different to those cards in only two respects: it is one-third the size of a normal credit card, and it has a sticky back, so it can be glued to your mobile phone.

While Google Wallet uses all the knowhow of one of the world's biggest tech firms to securely store a user's credit cards and turn their mobile phone into a payment device using built-in near-field communication (NFC), Barclaycard's contactless payment option is a rather jerry-rigged affair.

It requires no upgrade to the user's phone - and indeed will be just as effective if users opt to attach it to a key-ring or even put it in their wallet.

PayTag's somewhat gimmicky premise has serious aims, however. Google Wallet has so far struggled to gain a foothold even in the US. Seven months after the technology was introduced, there are still only two handsets on the market - Nexus S 4G and the Galaxy Nexus - capable of using the app.

PayTag is not limited by mobile phone technology. The BBC suggests that if Barclaycard can prove their customers take up the new card in sufficient numbers, it will allow them to go to a mobile phone manufacturer and press the case for inserting a payment chip into handsets during production.

The other issue Barclaycard hopes to overcome with PayTag is that small payments are normally the preserve of cash and debit cards. Barclaycard will hope that PayTag trains its customers to grow accustomed to using their credit card to buy small everyday things such as sandwiches.

David Chan, chief executive of Barclaycard Consumer Europe, said he wanted the product to "open people's eyes to mobile payments".

As ever there are security fears - a phone with a credit card stuck on the back is presumably more attractive to thieves than one without - but these will be allayed by Barclaycard's promise to refund defrauded customers without question. PIN numbers will also occasionally have to be entered at the checkout.

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PayTag falls short of what a mobile payments service should deliver in 2012, for two reasons. Firstly, it is merely an incomplete copy of just one of its user's bank cards and secondly, it places a very low limit on the transaction amount, which requires that consumers have a back-up payment plan. In other words, PayTag users would still have to carry their physical wallets around. So what's the point?

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