Residents of Kingswood Villas in Yuen Long are to be among the first in the territory to use smart cards after developers Cheung Kong Holdings signed a contract for a $1 million system.
Unisys Hong Kong will provide readers, transceivers, a microwave station and about 10,000 smart cards to the New Territory's development.
The technology will be used initially on the residents' bus service to the urban areas, but later integrated into other services.
The smart-card technology is 'contact-less', meaning that the signal from the card is picked up by a radio frequency reader and does not have to be inserted in the reader equipment.
On the bus, the reader then transmits the transaction data by microwave to a centralised system for audit purposes.
Cheung Kong said the system would facilitate an easier method of transport. For instance, residents using smart cards would not have to carry large amounts of small coins for urban travel.