Barclaycard is to team with Oyster to put its credit card and Transport for London’s (TfL) smartcard travel pass on one piece of plastic.

Barclaycard has signed an agreement with TranSys, the consortium which runs Oyster card in partnership with TfL to combine Oyster and Barclaycard on one piece of plastic. The deal includes the exclusive rights to place Oyster on Barclaycard and Barclays Connect Visa cards for at least the next three years.

Barclaycard, in conjunction with TfL, TranSys and Visa, will be conducting a live trial in London in 2007 and plans to roll out the technology to its customers later in the year.

The new card will have three separate functions, acting as a standard Chip and PIN card; an Oyster card for London Transport and some rail services; and new technology allowing contactless payment for low value transactions. New technology will allow cardholders to pay for low value transactions by waving the card over a contactless reader in participating shops.

Barclaycard said ‘wave and pay’ technology means faster, more convenient payments as there is no need for a PIN or signature.

The system reduces the need to carry cash and is particularly aimed at retail environments such as fast food outlets, coffee shops, newsagents, off licences, bars, pubs, parking facilities and vending machines. Transactions are processed through the same reliable and secure payment network used for Chip and PIN.

Commenting on the deal, Antony Jenkins, Barclaycard’s chief executive said: “Putting Oyster and Barclaycard together makes life even easier for Londoners and takes our customers an important step closer to fully contactless card payments elsewhere.”

The announcement builds on contactless payment pilots carried out by TfL last year and its invitation for proposals for a partner with experience of financial regulation and electronic payment schemes to incorporate an e-money feature into Oyster.

At the time the Mayor of London Ken Livingstone said the e-money facility would allow the 3,850 shops currently contracted to sell TfL tickets to deduct the value of non-ticket related purchases from the card in place of other payment methods.

Livingstone said pilot schemes were underway in the London Boroughs of Greenwich, Newham, Croydon and Lewisham, using library and leisure cards for Oyster-card travel last March.