MAC 07: Pay-Buy-Mobile Trials Begin

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 enable contactless payments using a mobile phone. Consumers will be able to use their handsets to 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 European Telecommunications Standards Institute (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. The NFC chip can communicate with existing contactless payment systems to deliver a wide range of secure, interoperable and transparent services, such as credit and debit payments. There are 35 mobile operators with 1.3 billion customers participating in the initiative.

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.

“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", said Shuan Ghaidan, Head of Product Sales and Delivery, Asia/Pacific MasterCard Worldwide.

“Just nine months after this program 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 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.