Category Archives: MOBILE PAYMENTS

Is NFC taking over our wallets?

NFC is here!Well, maybe still a few months/years away of being thoroughly defined and reaching all regions and operators worldwide but trials have certainly started and big brands are looking into solutions to adjust their mobile payment offerings on this technology.

In the UK, mobile carrier Orange announced the first mobile phone contactless payment service in the country back in May this year. The app is called “Quick Tap” and you need to have a Barclays credit or debit card in order to use it. If you meet the requirements then you are ready to pay with your phone in more than 50.000 locations whether you want to pay in McDonald’s or to drink a Cappucino thanks to your phone in Pret a Manger.

In the meantime in the US, the Isis telcos (Verizon and AT&T, the two largest carriers in the US are part of this consortium) are key in the evolution of NFC; Companies with mobile platforms such as Google which recently announced their mobile wallet based on this technology and which is currently only supported by Sprint, will have to collaborate with the consortium if they want their solution to reach the majority of subscribers with Smartphones in the US. One of the main problems faced by these mobile platforms, is the lack of experience regarding regulations in mobile payments, implementing the level of security for this type of transactions, etc. Although, no doubt, give them some time and theirs will probably be the most popular and successful options.

Companies specialized in payments and financial services such as Visa, MasterCard and American Express don’t want to fall behind either, and take the risk of not being a strong competitor on this field by solely sticking to pure credit and debit card payments; This is why all of them in one way or another are starting to build their own solutions or partnering with other companies to do so.

Visa Mobile Contactless Payment solution was certified for commercial use at the end of 2010.This solution was included in the list of Visa compliant products available for potential commercial deployment by financial institutions in the U.S. and selected markets. Some of the Smartphone models compatible with their solution? BlackBerry® BoldTM 9650[2], the iPhone 4, the iPhone 3GS, iPhone 3G, and the Android based Samsung Vibrant Galaxy S.

On the other hand, MasterCard has been looking into mobile payments since 2001, according to James Anderson, VP of Mobile at MasterCard. The company introduced “PayPass” back in December of 2002. They run a trial for this “contactless” payment program in a few markets with banking customers such as Citibank. Some brands such as McDonald’s started accepting this payment form back in 2004. It was that year when MasterCard also worked with Motorola to start testing NFC technology. Since NFC is based on existing contactless infrastructure, Paypass is a very important step towards this field. Through 2009 and 2010 Mastercard performed trials with Near Field Communication. Currently, MasterCard is working on different initiatives involving NFC (rumors of MasterCard’s involvement with Google and Citibank to build a Google-branded mobile payments system?) that will continue through 2012 and will definitely be a powerful option for mobile payments.

American Express? Yes, it made its first move towards NFC payments launching “Serve“, their digital payments platform.

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You will be making mobile payments, no doubt

Everybody agrees that mobile phones and applications are the hottest topic in technology. There is one area in particular however that is gaining a lot of popularity and will continue growing in the next few years; I am talking of course about mobile payments. This  technology allows the purchase of digital content such as ring tones or music and hard goods such as books, using a mobile phone.

There are currently 4 main models used for mobile payments;

  • Premium SMS (PSMS) – With this model, an end user can choose to buy a good with a mobile phone from a content provider’s website or by sending a text message to the merchant’s shortcode. The content provider will then send a premium SMS and the payment will be added to the user’s mobile phone bill. Sometimes the SMS sent by the end user to the shortcode is enough to bill the consumer without the need of receiving an SMS for the billing.
  • Direct Mobile Billing – In this model, the end user selects the mobile billing option when making a purchase at an e-commerce site and then has to go through an authentication process involving a secure pin and a one-time password, after which the consumer’s mobile’s account is charged for the purchase.
  • Mobile web payments (WAP) – The Wireless Application Protocol (WAP) is used for this model. The end user navigates through web screens and possibly other applications downloaded and installed on the mobile phone to make the payment.
  • NFC (Near Field Communication) – This system is still relatively new and it is expected to become one of the most popular ways to make payments with a mobile phone. It involves something as simple as waving the phone on  a reader enabled with NFC  to make a payment. Some smart phones already contain NFC chips to make use of this new technology.

Top companies such as Google are adopting these technologies and building their own products such as the Google Wallet, so stay tuned for new products and start betting on which will be the future winner in the mobile payments arena.

G+ professional community created an infographic describing how experts see mobile commerce in the next four years, focusing their attention in the NFC technology. Take a look and picture yourself waving your phone to buy a goodie because NFC is almost here;

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