In other payment technology news, Oyster, a contactless London transit card (a kind of E-ZPass or SpeedPass for the tube), may soon be spendable at stores above ground:

Barclays Bank, BBVA, JPMorgan, Royal Bank of Scotland and Paypal are among the firms to have been shortlisted as potential partners for Transport for London's (TfL) Oyster e-money project.

TfL says twenty companies initially replied to its request for proposals on extending the use of Oyster contactless transit passes to pay for low value purchases at retail stores in the capital.

[…] Trials of the scheme will take place in late 2005 or early next year.

Jay Walder, managing director of finance and planning at Transport for London says: "The use of contactless smart cards for low value payments is growing in popularity around the globe. Such schemes are now well established in Hong Kong and Japan and significant trials are taking place in the United States."

He says Oyster has the largest customer base of all smart cards in the UK, with 2.2 million users and a significant level of public trust.

"Extending Oyster to include low value payments is a natural progression which will make the smart card even more convenient.”

This seems like a plausible way forward for prepaid card money – expanding the circle of acceptance for a card that people carry already, rather than trying to get them to carry a new card (which has never test-marketed well). But why not let all trustworthy potential partners become Oyster issuers, rather than make it a franchise monopoly?