The high cost of smartcard technology forced high street banks to subsidise rollout of electronic point of sale (Epos) terminals this week.
Banks will pay an undisclosed sum, believed to run into millions, to subsidise the hardware that retailers need to read the next generation of smart credit cards under development by all banks.
NatWest has created a Commercial Fund together with other card issuing banks, including Barclays, Lloyds TSB and HSBC.
Retail representatives and analysts had called on banks to shoulder the burden of rolling out smartcards designed to eliminate fraud associated with magnetic strip cards.
Terry Surridge, Natwest's head of credit and debit card business, said his bank had ordered 50,000 smart card capable Epos terminals and was ready to subsidise retailers that wished to buy the terminals instead of renting them. Devices can cost several thousand pounds, he said. Natwest will begin subsidising retailers this week.
Surridge added: "We are prepared to pay a sum of money that says if you are incurring additional expense, we can help a bit. The fund is a recognition that there is a need to work with retailers rather than impose something on them."
None of the other banks could comment on whether it was ready to subsidise retailers.
Royal Bank of Scotland (RBS) has become the last major high street bank to upgrade its cash machines to support smartcards. The bank had not joined an industry initiative that will see 12,000 of the UK's 25,000 machines upgraded by the summer. A spokesman said the bank wished to set its own timetable, and would complete the task by July 2000.
Visa has finally unveiled its common electronic purse specification, which will set a single worldwide technical standard for its e-purse scheme.
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