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Telefónica Movistar, La Caixa and Visa begin pre-commercial NFC pilot in Spanish resort of Sitges

Sarah Clark — Fri, 28 May 2010 12:50:31 +0000

1,500 customers of Telefónica and La Caixa have been issued with Samsung S5230 NFC phones which they can use to make debit and credit card payments in taxis, sports centres, at market stalls and in retail stores.

SITGES: 1,500 participants can use Samsung NFC handsets at 500 merchants in the Spanish resort

The pre-commercial NFC trial in the Spanish resort of Sitges, announced in February, has gone live.

The 'Mobile Shopping Sitges 2010' pilot is being led by mobile network operator Movistar, part of the Telefónica group, La Caixa and Visa and includes the participation of Gemalto, Giesecke & Devrient, Samsung, Ingenico and the Sitges city council.

1,500 customers of both Movistar and La Caixa have been chosen to participate in the pilot and can use their Samsung S5230 NFC phones to make payments using their La Caixa credit or debit card accounts at 500 merchants in the town.

Transactions valued at up to €20 can be made without a PIN and larger transactions can be carried out provided the customer enters their PIN on the keypad of the merchant's POS terminal to confirm the purchase.

Each of the pilot's participants are being given training on how to use their phones and a website providing comprehensive information on the new service and how it works has been set up by Telefónica at www.mobileshopping.es.

"Telefónica will expand the offer to use its technology to other banks, and expects that La Caixa will partner with other platforms in addition to Visa," Kim Faura, head of Telefonica's Catalonia region, has told Europa Press.

The pilot is scheduled to last for six months. Participants will not be required to return their NFC phones at the end of the pilot, however, as there are plans to both continue the service in Sitges and to expand it to the city of Barcelona, just 35km up the coast from the resort.

The start of the Sitges pilot is the second of a pair of significant moves towards the adoption of NFC by Telefónica to take place in the last seven days. Earlier this week, we reported that the company's first commercial NFC service has gone live in the Czech city of Pilsen and that Telefónica's business strategy for NFC deployments is now in place. An NFC bus ticketing trial is also due to go live in the near future in Lima, Peru.

This article was first published at www.NearFieldCommunicationsWorld.com.

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Telefónica O2 launches its first commercial NFC service — and sets out strategy for future deployments

Sarah Clark — Thu, 27 May 2010 10:26:48 +0000

The mobile network operator is starting small with a limited rollout in the Czech city of Pilsen but a business strategy is now in place and commercial launches in the UK and Spain could be next.

TELEFONICA: Commercial launches in the UK and Spain will follow soon

Telefónica O2 Czech Republic has put a limited number of NFC phones, pre-loaded with the local Plzeň transport and city services card, on sale in the Czech city of Pilsen.

The launch of the new service marks the first time that Telefónica, which offers mobile services in sixteen countries in Europe and Latin America, has offered NFC phones on a commercial basis to its subscribers. For the launch, Telefónica O2 subscribers can obtain a Nokia 6212 Classic NFC phone on a contract for 495 crowns (US$24), or without a contract for 4495 crowns (US$216), from any of the operator's six stores in Pilsen.

The Plzeň card is issued by the city's regional transport operator PMDP and allows local residents to pay for public transport, purchase tickets to local events, make payments in local stores and receive special cardholder-only discounts. Some 230,000 local residents currently hold a Plzeň card.

"Now anyone can buy a mobile phone that supports NFC and start benefiting from this service," says Michael Kraus, CEO at PMDP. "I know of no other city in Europe where [there is] NFC technology in commercial operation."

Preparations

At Telefónica's head office in Madrid, meanwhile, preparations are gathering pace for the introduction of larger scale commercial deployments in the near future.

Technical development work in now complete, Michiel Van Eldik, Telefónica's group director for new business and innovation, has told NFC World, and a business strategy for NFC services is now in place. Key to that strategy, says Van Eldik, is an understanding that "money will go mobile" and that "the biggest favour we could do ourselves as an industry is to recognise that there is money to be made for all of us."

"The biggest favour we could do ourselves as an industry is to recognise that there is money to be made for all of us"

"It has to be based on partnerships," he added, explaining that his experience working on Telefónica's mobile health initiatives has taught him the value of each party being responsible for its own area of expertise. So, while Telefónica has a banking license in some countries, cooperation with other service providers will be the way ahead, Van Eldik says. "We could try and become doctors, but that would be the biggest mistake we could make," he explains.

Telefónica's strategy, therefore, is multi-layered, involving a number of different business and consumer propositions with the aim of providing solutions that work for all. Currently, they include:

Co-branded products. Telefónica has signed a deal with Visa Europe that will see the introduction of services similar to the UK's existing O2 Money product across all the European countries in which Telefónica currently operates. Here, the operator will partner with a Visa card-issuing bank in each country and, in exchange for its business, will receive a share of transaction revenues or, as Van Eldik neatly puts it, "we will take a slice of the dice." A similar deal is also set to be signed with either Visa or MasterCard for the Latin American market in the near future.
Existing card products. A number of pricing models are under consideration to enable banks and other card issuers to add their products to Telefónica subscribers' NFC phones, although the operator currently favours a straight rental fee.
B2B customers. For merchants and other service providers, Telefónica will offer a range of products and services "that work out-of-the-box" and will also offer tools for developers, including APIs and toolkits.

Before any large scale launches can take place, however, phones must pass the scrutiny of Telefónica's consumer focus groups. Since its phones are subsidised, Van Eldik explains, decisions over which handsets the operator should offer are only made after in-depth customer research has been conducted — and "they must see a clear advantage" before a device can be offered to subscribers.

That said, in volume, the operator is now expecting to pay a premium of just US$5 to have NFC functionality built into its phones. That means, Van Eldik says, that if a sufficiently strong case can be made for being able to generate revenues from NFC service provision, it is possible that this premium would not be passed on to the customer.

Performance issues

The need for reliable handsets is also still a potential stumbling block. Performance issues with the Samsung S5230 NFC phone became apparent during the NFC trial conducted at the Mobile World Congress in February. Telefónica plans to use the same phone for the pre-commercial pilot it will be running in Sitges, Spain from June this year and, says Van Eldik, the operator has been working very closely with Samsung and with its NFC SIM supplier Giesecke & Devrient since February to ensure the phone meets its performance requirements in time for the launch.

A large scale trial is also due to begin in Peru soon, which will see commuters in the city of Lima able to use NFC phones to purchase bus tickets and, says Van Eldik, we are "running a few trials with stickers" and "we are looking at some other solutions too".

Where will the first major commercial launches take place? Spain, the UK and the Czech Republic are the furthest ahead of the countries in which Telefónica operates, says Van Eldik, with each having the potential for expansion in late 2010 or early 2011. "In these countries, we are seeing more and more evidence of market readiness and we at Telefónica are most advanced in our developments," he concludes.

Meanwhile, Pablo Montesano, Telefónica’s director for new businesses, told delegates attending the Mobile Money Summit in Rio de Janeiro this week that the operator estimates that it could ultimately generate US$1.5 billion from mobile financial services.

"The last 18 months have been important to our understanding," he explained. "We consider financial services one of the biggest opportunities within the group." Montesano also confirmed the operator's commitment to a partnership model, the GSMA's Mobile Business Briefing reports:

"Telefonica is looking at an open model whereby it could share the spoils with several partners, he said. And Telefonica does not believe in 'the silo approach' and is prepared to work with other mobile operators to see services become successful. Montesano has had to convince colleagues internally that co-operation rather than competition is the way to go.
Mobile money is also a rare opportunity to create value both for shareholders and the wider society, said Montesano: “Even a one percent inclusion of the unbanked creates a significant improvement in reducing inequality.”

This article was first published at www.NearFieldCommunicationsWorld.com.

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Polkomtel and BZ WBK bank to run NFC trial in three Polish cities

Sarah Clark — Thu, 29 Apr 2010 09:15:17 +0000

Mobile network operator Polkomtel has partnered with BZ WBK bank to run an NFC payments trial in the cities of Warsaw, Wroclaw and Poznan.

The trial is due to begin in June and five hundred customers, who will receive Samsung Avila NFC phones, will be selected for the trial during the next two weeks, Polish telecoms publication Telepolis reports.

The phones will be loaded over the air with contactless Visa PayWave cards issued by BZ WBK and consumers taking part in the trial will be able to use them to make payments at any contactless card accepting merchant in Poland.

This article was first published at www.NearFieldCommunicationsWorld.com.

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NFC bus ticketing trial to take place in Madrid

Sarah Clark — Fri, 12 Feb 2010 16:33:35 +0000

An NFC bus ticketing pilot is to be run in Madrid, Spain by Bankinter and Empresa Municipal de Transportes de Madrid (EMT), beginning in mid-2010.

In the trial, the participants' NFC phones will act as payments cards that can be reloaded over-the-air or via the internet.

The trial will use a Trusted Service Manager (TSM) solution developed by Ericsson. Bankinter will be responsible for handling the payments function, including managing the reloading of funds to the phones. The system used will be compatible with Mifare DESFire contactless tickets.

Vodafone Spain is also running an NFC pilot in Madrid, with Spanish rail operator Renfe. And, earlier this week, Telefonica announced it is to run an NFC trial in the Spanish resort of Sitges, in conjunction with Visa and La Caixa bank.

This article was first published at www.NearFieldCommunicationsWorld.com.

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Telefonica announces NFC trial in Sitges, Spain

Sarah Clark — Thu, 11 Feb 2010 12:01:54 +0000

Telefonica has announced this morning that it is to run an NFC trial in the Spanish resort of Sitges, in conjunction with Visa and La Caixa bank (see a photo from the press conference here). The phones will be supplied by Samsung, which is expected to officially launch its new NFC handset at the Mobile World Congress next week.

The trial will begin in May, according to Spanish journalist Albert Cuesta, and will enable 1,500 consumers to use their phones to make purchases at 500 shops in Sitges.

Update: The trial will last for six months and there are plans to extend the system to also include the city of Barcelona, 40 km from Sitges. "We'll be adding more cities," says Kim Faura, head of Telefonica for the Catalonia region.

This article was first published at www.NearFieldCommunicationsWorld.com.

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Visa Europe to invest €200m in development of contactless payments by card and mobile

Sarah Clark — Thu, 04 Feb 2010 10:32:04 +0000

"M-commerce is a strategic priority," says Visa Europe's head of UK and Ireland, "we are working and talking with all the mobile operators and handset manufacturers to develop standards for payment on mobile phones."

€200M: Visa Europe boss Marc O'Brien told Irish banks that the payments network is investing heavily in NFC and contactless

Visa Europe is to spend €200 million on R&D for low-value contactless payments by card and mobile device, says Marc O'Brien, Visa Europe's head of UK and Ireland.

The information was revealed by O'Brien during a visit to Dublin to brief Irish banks about the potential of contactless cards and NFC payments.

"Ulster Bank and Halifax now issue Visa Debit cards to their customers," a Visa Europe spokesman told NFC World. "Visa Debit is an innovation path to both contactless and mobile payments. Visa Europe discussed the successful trials it has had with contactless payments in other markets and shared information about them with Irish banks."

A report in Irish tech news publication Silicon Republic provides further details on Visa Europe's strategy and the size of the investment it is willing to make in the contactless and NFC market:

Looking to the future, O'Brien said Visa is hard at work researching and developing new ways for people to pay and one of the areas being given serious consideration is contactless payments via mobile phones using near field communication (NFC).
"For us, m-commerce is a strategic priority and we are working and talking with all the mobile operators and handset manufacturers to develop standards for payment on mobile phones."
O'Brien says Visa spent €800 million over the last five years on R&D, out of which €170 million went into chip and PIN. "We envisage spending a further €200 million on R&D into low-value contactless payments by card and mobile device."

An earlier newspaper report that the Irish banks are looking to implement NFC as early as 2011 has been dismissed, however. "The report was slightly overzealous, there are no confirmed plans to launch NFC mobile payments next year," says the Visa spokesman.

This article was first published at www.NearFieldCommunicationsWorld.com.

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Irish banks to launch NFC services in 2011?

Sarah Clark — Thu, 28 Jan 2010 14:23:59 +0000

Executives from Visa Europe are meeting with Irish banks in Dublin this week with a view to launching commercial NFC services in Ireland, according to a report in the Irish Examiner:

Mobile phones will soon be heard ringing at the tills as plans are finalised so that they can be used as debit cards.
Discussions are taking place which will see Irish banks offer technology which would be placed in mobiles so that owners can pay for small purchases.
It is hoped that the technology will replace cash for small purchases.
It is hoping the plans will be finalised by 2011.

Visa Europe is also planning to introduce contactless cards in Ireland, for purchases up to a value of €20, the article continues.

This article was first published at www.NearFieldCommunicationsWorld.com.

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Luottokunta begins Visa’s first NFC trial in Finland

Sarah Clark — Thu, 22 Oct 2009 09:51:33 +0000

A small scale near field communication trial has begun in Finland. Forty members of staff from payments provider Luottokunta, Sodexo, Visa Europe and Venyon have been issued with NFC handsets that they can use to make payments at merchants equipped to handle contactless payments in Helsinki and at Luottokunta's offices. The trial participants are able to make small value payments, under €20, without a PIN and high value payments, above €20, by entering a PIN on their handset.

"The six month trial also paves the way for contactless payments in Finland, allowing Visa card holders to make contactless payments using their Visa credit or debit cards as well as NFC-enabled mobile phones," says Visa Europe.

"At Visa, we have a vision for the future of payments and bringing Visa's contactless technology to our mobile phones is key to this vision," says Sandra Alzetta, senior vice president for innovation and new product and channel development at Visa Europe. "Finland is the birthplace of some of the most cutting-edge technology and services the mobile industry has seen, and it is no surprise that this key market in the Nordics has also embraced the latest trends in payments."

"Trials are a key milestone in building a sustainable mobile payments ecosystem to bring together banks, mobile operators, payment schemes, handset manufacturers and the numerous other parties required to deliver services to consumers," she added. "This initiative with Luottokunta is a first step for the Finnish market."

"Finland is a leader in card payments in Europe, so it is only natural that we are a front-runner in developing new payment solutions," explained Heikki Kapanen, CEO of Luottokunta. "We have high expectations of contactless payments and see it as a wonderful opportunity for the future."

This article was first published at www.NearFieldCommunicationsWorld.com.

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NFC payments trial launched in Italy

Sarah Clark — Wed, 23 Sep 2009 07:06:57 +0000

Credit Valtellina already issues contactless Visa PayWave cards in Italy's Sondrio province under the Tellcard brand name. Now it is testing NFC with Visa Europe, in a small scale trial involving fifty of the bank's employees. More (in Italian) in Cellulare Magazine.

This article was first published at www.NearFieldCommunicationsWorld.com.

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NFC proves popular in Swiss trial

Sarah Clark — Thu, 07 May 2009 12:25:28 +0000

More than 90% of the participants in a small scale Swiss trial say they will use NFC when it becomes commercially available.

SWISS TEST: Triallists loved NFC, but 'before any potential rollout can go ahead other important questions need to be clarified', says Credit Suisse

A near field communication trial in Switzerland has been hailed a resounding success by participants, with 90% saying they liked the ease and convenience of making payments via NFC and the same percentage saying they will use the technology when it becomes commercially available.

In terms of a commercial rollout, however, the position is less positive. "Although from a technical point of view an imminent rollout would be possible, certain requirements for commercial implementation still have to be met," says Credit Suisse, which ran the trial in conjunction with PostFinance, SIX Multipay, Swisscard, Swisscom and Visa Europe. "Discussions on these requirements are ongoing."

The trial involved 171 employees of Credit Suisse, Swisscard and SIX Multipay and ran from September until November 2008. Participants could make payments at their staff restaurants using either a contactless Visa credit card or an NFC phone loaded with a Visa payWave application.

"Feedback given by the test participants points to a variety of factors that are of key importance for the success of contactless payment," says Credit Suisse. "The number of acceptance points, for example, is one of these factors. Test participants see big advantages in the new payment solution, especially at points of sale with a normally high percentage of cash payments and a need for fast payment processing. A large number of participants expressed the wish to be able to pay contactlessly at kiosks and public transport ticket dispensers."

"Commercialisation depends on other factors," Credit Suisse added, however. "The test showed that paying by mobile phone works from a technical point of view, is easy and convenient, and meets with client interest. However, before any potential rollout can go ahead other important questions need to be clarified and key success factors achieved. For example, a wide selection of NFC-capable mobile telephones and a dense network of acceptance points are relevant factors that are not yet in place."

Last month, Switzerland's three leading telcoms operators formed a work group designed to address these issues, open to all interested parties.

This article was first published at www.NearFieldCommunicationsWorld.com.

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