RFID subway pass? Sure, New York says

Is waving better than sliding? Citigroup, MasterCard to test contactless PayPass cards with MTA riders this year.

Citigroup is planning to pilot the use of contactless payment systems in the New York subway.

Selected customers of the Metropolitan Transportation Authority will be able to pay for a train ride at the subway entrance by tapping or waving a payment card at a turnstile reader, much like London's Oyster card scheme allows for the Tube. MTA riders currently pay their fares by sliding credit card-like MetroCards.

Citigroup has teamed with MasterCard, which has installed its PayPass tag readers in some stations. The readers display a logo so people know which turnstiles accept their cards, embedded with radio frequency identification, or RFID, chips instead of a magnetic stripe.

"The goal of this trial is to evaluate the speed and convenience that contactless payments can provide to New York's busy commuters," T.J. Sharkey, vice president of business development for MasterCard, said in a statement. "As anyone who has ever commuted through the subway system knows well, time is a critical factor."

The cards can be used anywhere PayPass is installed, including McDonald's or 7-Eleven stores. The six-month trial is set to begin later this year.

Tokyo dwellers are also using contactless payments in Japanese railway stations.

Japan Rail recently launched its Mobile Suica service, which allows people to pay for their journey by swiping a "mobile-phone wallet"--a handset with contactless-payment capabilities--over the turnstile reader.

London's Oyster card e-money scheme is set to begin this year. It will allow commuters to buy goods or parking time with their travel cards.

Dan Ilett of Silicon.com reported from London.

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