Operators to Launch NFC-Based Mobile Payment Services

Over the next several months, 12 mobile operators will run trials of contactless mobile payment services in Australia, France, Ireland, Korea, Malaysia, Norway, The Philippines, Singapore, Taiwan, Turkey and the U.S. as a precursor to commercial launches. The trials form part of the GSMA's Pay-Buy-Mobile initiative, which is designed to provide a single global approach to enabling contactless payments using a mobile phone. Consumers will be able to use their handsets to quickly, easily and securely pay for goods and services in shops, restaurants and train stations.

The Pay-Buy-Mobile initiative supports the use of the Single Wire Protocol, which was adopted by ETSI as a standard in October 2007, to link the Universal Integrated Circuit Card (UICC) contained within the mobile handset with the phone's embedded Near Field Communications (NFC) chip. There are a total of 35 mobile operators with 1.3 billion customers participating in the initiative.

In a global first, executives from Korean operator KTF have paid for goods by passing their NFC-equipped handsets by contactless readers in retail outlets in Korea, Taiwan, and the U.S. in a trial involving real transactions facilitated by MasterCard. For this trial, MasterCard's Paypass application and Shinhan Bank's credit card application were downloaded to a KTF UICC embedded in the mobile handsets, which were provided by LG Electronics and Samsung Electronics. The retail outlets at the respective locations were equipped with readers that support the NFC interface and accept MasterCard's Paypass applications, enabling real transactions in three different countries.

"Just nine months after this programme was launched in Barcelona, the first pioneering mobile operators are preparing for the rollout of commercial services that have the potential to become the foundation of a global, interoperable mobile payment service," said Rob Conway, CEO of the GSMA, the global trade association for mobile operators. "Mobile payment services, which will enable transactions to be completed faster in shops, restaurants and train stations, will also make it easier for merchants to offer their customers precisely-targeted discounts and other promotional offers."

Both consumers and merchants see significant benefits from using the mobile phone as a payment form factor at point of sale, according to research carried out by Serrula on behalf of the GSMA. Two-thirds of the 2,574 consumers in 17 countries surveyed said that they expect to begin using their mobile phone to pay at point of sale within two years of the service becoming available. Moreover, 50% of the 240 merchants from 10 countries surveyed see promotional opportunities in using the mobile phone as a payment device.

"The popularity of MasterCard PayPass, coupled with the widespread use of wireless technology has created many payment opportunities far beyond that of the simple swipe of a card," said Shuan Ghaidan, Head of Product Sales and Delivery, Asia/Pacific MasterCard Worldwide. "This new NFC-based KTF mobile payment phone shows innovative use of the latest technology to increase convenience by giving consumers the ability to use their mobile phones to make contactless payments anywhere around the world where PayPass is accepted. MasterCard is pleased to contribute to the establishment of global standards that will help push the mobile payment market to the critical mass level."

The 12 operators running trials include AT&T, Far EasTone, Orange, KTF, Maxis, SFR, SingTel, Telstra and Turkcell.

LG, Motorola, Nokia, Sagem and Samsung are among the handset makers developing phones for NFC-enabled mobile payment services. Gemalto, G&D and KEBT are among the UICC card suppliers supporting NFC-enabled mobile payment services. Vivotech and Harex are among the companies developing NFC-enabled readers that support NFC-enabled mobile payment services.

Posted to the site on 13th November 2007