The system, which is similar to Transport for London's Oyster Card, will be installed on FirstGroup's 5,000 buses as the company aims to become the first bus operator outside the capital to offer the technology that enables passengers to pay by 'touching in and touching out' their bank cards.

In addition, the new system will also be able to accept payments made by touching a mobile phone to the reader, when the necessary technology becomes more available in mobile phones.

FirstGroup is investing £27 million in the technology, and will work with Almex, part of Hoeft & Wessel Group, who won the £18 million contract to supply the ticket machines.

It will implement Almex's Optima BL machine, which will be able to read contactless debit or credit cards and smartcards approved by , a government-backed non-profit organisation that sets a common technical standard for 'smart' cards used for transport as well as council services.

The remainder of the investment will be spent on design, build and testing, infrastructure including hardware and software, and the development and integration of a web portal and online call centre to support the service.