More than 1,000 retailers, including big names such as Coffee Republic, Krispy Kreme and Books Etc, will accept contactless payments when Barclays launches the technology next month.

From September, Londoners will be able to pay for items under £10 by waving their card over a reader in the City and Canary Wharf using Barclaycard's OnePulse card, which combines credit, contactless and Oyster travel functionality.

The bank says contactless payments will mean faster transactions and reduced queues because there is no need to enter a PIN or signature or receive a till receipt. It predicts that several thousand retailers will also join up by the end of 2007.

Retailers including Threshers, Yo Sushi, Eat and the Science Museum have also signed up to install the new OneTouch terminals provided by the bank to accept contactless payments.

Sandwich shop Eat is to install the technology in 25 of its London shops, said financial director Guy Harvey.

‘By using OneTouch, our staff will need less time to cash up in the evenings because we will take fewer coins during the day,’ he said. ‘It will also help eliminate some of the frustrations for our customers such as queues in the busy lunchtime rush.’

Krispy Kreme marketing director Judith Denby said the technology will make it easier to manage busy periods. ‘We will be able to process more transactions in a shorter time,’ she said.

Barclays said most of the interest in contactless payments has come from coffee and food shops. Two hundred and twenty nine shops have signed up, plus another 214 newsagents.

Barclaycard Business managing director Bill Thomson said the bank spent months demonstrating the technology to encourage retailers to sign up.

‘We have seen a surge of retailers looking to adopt the OneTouch technology and it will offers both retailers and customers a secure method of payment that will help to cut down those heavy London rush hour queues,’ he said.