The Post Office has revealed plans to roll-out contactless payments technology across its entire network, which will allow Mastercard and Visa customers to make payments of up to £20 using near field communication (NFC) equipped mobile phones across 30,000 counter positions in 11,5000 branches.
Holders of MasterCard Paypass or Visa payWave cards will also be able to use the systems.
The roll-out will be the largest of its kind to date in Europe and will begin on the 6th June in almost two hundred branches surrounding the various Olympic sites. The full implementation is expected to be complete by the end of 2012.
"Contactless will bring huge benefits to our customers by increasing choice and reducing transaction times," said Lesley Sewell, CIO at the Post Office.
She added: "Over the next few years, many Post Office branches will be transformed, becoming more customer focused, opening for longer and providing services in a convenient and efficient manner."
The Post Office is currently undergoing a transformation agenda and released details of a £180 million two-year framework in February to find a partner to provide it with the design, support and implementation of IT services.
Fujistu built the Post Office's current IT system, dubbed Horizon, which has been at the centre of much controversy following a number of failures and reported accounting problems.
The contactless payment rollout will put NFC technology within three miles of 99 percent of the UK population, according to the Post Office.
"There are over 21 million contactless Visa cards in the UK today and by the end of the year there will be more than 30 million around the country," said Mark Austin, head of contactless at Visa Europe.
He added: "Our research tells us that people who experience contactless payment love the convenience and speed that it enables.
"This announcement marks a major milestone in making that technology even more widely available across the UK."
Visa recently added smartphones from Samsung Electronics, Research in Motion and LG Electronics to a list of devices it has certified to work with thousands of NFC-based payment terminals it has in Europe. It also recently announced that WHSmith would be rolling out the technology across 46 of its UK stores by Spring 2012.
However, it was also revealed this week that London Underground currently doesn't believe NFC technology read times are fast enough to implement across London's transport network.
A Transport for London executive said that for NFC to work the read speed had to be faster than 500 milliseconds, which has not been possible due to a standards change in 2008.
This change saw the secure element move from the phone to the SIM card, which increased the distance from the antenna and therefore extended the read speed.