Your credit card - now available as a sticker as Barclaycard launches PayTag

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Credit cards could be replaced by stickers for small transactions, payments giant Barclaycard has claimed.

The firm’s new "PayTag" is just one third of the size of a normal bank card, and the firm hopes that users will stick it to the back of their mobile phones .

The launch is the latest in a new bid by companies including mobile networks Orange and O2 and web giants such as Google to encourage users to pay with “contactless” technology that does not always require a pin code.

Barclaycard claims 150,000 contactless payment terminals will be in shops including Waitrose, Tesco, McDonalds and sandwich chain Eat by the end of the year, but it does not release figures on how many people are currently using them.

The limit on contactless payments is currently £15, but it will rise to £20 in June. London buses will also accept contactless payments by the end of this year, with the rest of the capital’s transport network following in 2013.

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The security of some contactless payments has been called into question, but a recent investigation by mobile phone security firm ViaForensics found that only a small number of the 15million contactless cards in circulation could be accessed easily. All fraud is covered by the card companies’ standard policies.

David Chan, chief executive of Barclaycard Consumer Europe, said the new type of card would complement traditional credit cards, and said that it was just as secure. He also claimed that the firm had done “huge amounts” of research to prevent the PayTags from falling off whatever they were attached to, and to make sure they did not leave sticky marks when they were removed from users’ phones.

He added that research showed sticking the cards to mobile phones was acceptable to consumers because they appreciated not having to carry a wallet, but were also used to looking after phones because losing them was as costly and inconvenient as losing a credit card.

Although he called PayTag “another milestone”, Mr Chan conceded that it was a halfway house until payment technologies was built in to phones. A study carried out on Barclaycard’s behalf predicts that £3billion worth of purchases will be made with mobile phones in the UK in 2016.

The PayTag will be offered free to all existing Barclays (LSE: BARC.L - news) customers, beginning today with a first, smaller group of customers.

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