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Visa Europe CEO Peter Ayliffe predicts Visa-branded contactless cards on issue in Europe will double to 12 million by the end of 2010.

Ayliffe made the comments on Jan. 19 in releasing Visa Europe’s 2009 financial results, which showed spending on Visa cards increased by a modest 3.7% during the year.

“Contactless payments will be as radical a change in the way we pay as e-commerce has been in the last 10 years,” he said in a statement.

The Visa Europe forecast was not long on details, however, and didn’t address the slow take-up by merchants installing terminals to accept the Visa payWave cards. But on the issuance side, Visa pointed to its key growth markets in Europe–the UK, Turkey and Poland (See chart below). It expects most of the new payWave cards issued this year to come from issuers in these markets.

The UK would account for most of those new cards, said Ayliffe. About 4 million Visa-branded cards were on issue at the end of 2009 in Britain, most credit and debit cards issued by Barclaycard or its parent Barclays. Among other issuers is HBOS, part of the Lloyds Banking Group, which began issuing Visa-branded debit cards in 2009.

At least nine banks in Turkey issue payWave, including DenizBank with its “Sea&Miles” card, which cardholders can also tap to pay fares on ferries.

In Poland, PKO Bank Polski announced earlier this month it would add the payWave application to more than 6 million Visa debit cards, reportedly starting in mid-2010. BZ WBK Bank launched PayWave in Poland in September 2008, targeting students. A published report in Poland said there were about 4,000 merchant locations accpeting payWave in Poland.

Besides the UK, Turkey and Poland, Visa has smaller contactless programs in Italy and Switzerland. It is running behind rival MasterCard Worldwide in contactless payment in a few countries, such as France and Italy, although Europe trails well behind the U.S. in contactless bank cards and terminals.

Ayliffe said in published reports that increasing contactless cards in circulation “gets the infrastructure in place for mobile payments.” Visa Europe, like MasterCard, has supported a number of trials putting its application on NFC mobile phones, which can be used at the same contactless terminals that accept cards.

But retail acceptance is generally lagging behind card issuance in the UK and elsewhere, and if Visa’s projection of 12 million contactless cards on issue in Europe by the end of 2010 comes to pass, it would only represent about 3% of the roughly 400 million credit, debit and prepaid cards that will carry the Visa brand in Europe by the end of 2010.