Telefónica positive on NFC
2 July 2010
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Extracts from Telefonicawatch, issue 2010.06. Click through for: the Executive Brief from this month’s report; the Issue Snapshot; or to contact us for more information about the full 50-page issue, this industry standard monthly report service, and ongoing subscription access.
Telefónica positive on NFC
Telefónica Group confirmed that the Czech Republic, Spain, and the UK are likely to be first markets in which it will launch commercial near-field communications (NFC) payment services.
Michiel van Eldik, Group Director for New Business and Innovation at Telefónica said that these three countries have already conducted various technology trials and consumer pilots (Telefónicawatch, passim), and will potentially see handset-based payment service launches 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. ”
– van Eldik.
The company cited its limited rollout of NFC-enabled Nokia 6212 handsets in Czech city of Pilsen (see separate report), to allow customers to pay for public transport, purchase tickets to local events, and make payments in local stores, as a demonstration of the readiness of its NFC systems for commercial launch.
Pablo Montesano, Director for New Businesses at Telefónica, speaking at the GSM Association‘s Mobile Money Summit in Rio de Janeiro, said that Telefónica estimates that mobile financial services could ultimately generate $1.5bn (EUR1.2bn) for the company.
” The last 18 months have been important to our understanding. We consider financial services one of the biggest opportunities within the Group. ”
– Montesano.
However, the company did cite the availability of reliable NFC handsets as a potential problem, after encountering performance issues with the Samsung S5230 NFC handset it used for a trial conducted at the Mobile World Congress in February 2010. The company said that it has worked with Samsung and Giesecke & Devrient, the NFC SIM supplier, to resolve the problems.
[Further reference: Telefónica O2 plans commercial NFC services -- FierceWireless, 28 May 2010.]
Telefónica España and La Caixa commence NFC pilot
Telefónica España and La Caixa, a Spanish financial institution, launched a six-month pilot Near-Field Communications (NFC) scheme in Sitges, Catalonia, in collaboration with Visa, Samsung and the Sitges City Hall.
The trial, dubbed “Mobile Shopping, Sitges 2010″, will involve 1,500 users and around 500 retailers, and allow customers to make purchases by tapping special NFC enabled handsets to the point-of-sale terminals using a version of Telefónica’s Movistar Wallet service.
Telefónica provide the NFC platform to manage the cards’ lifecycle, including issuance, activation, use and withdrawal, remotely and in real time, using over the air (OTA) technology.
For its part, La Caixa will issue the Visa cards to be placed in the trial participants’ mobile phone SIM card, and administer the retailers’ point of sale devices. Samsung will supply the NFC-enabled handsets. Gemalto will provide the NFC service platform and SIM cards.
The trial was announced at the Mobile World Congress in Barcelona at the beginning of 2010 (Telefónicawatch, 2010.02), and comes as Telefónica increases testing of NFC technology, with wider launches predicted, despite concerns over the quality of existing handsets (see separate report). In the UK, where early trials took place, the local O2 unit is focusing on partnering to provide financial services, and has indicated it is unlikely to commercialise NFC until the capabilities of the available devices have caught up with the technology.
[Further reference: "la Caixa", Telefónica and Visa start in Sitges the first mobile shopping experience in Spain -- La Caixa, 28 May 2010.]
O2 launches NFC service in Pilsen
Telefónica O2 Czech Republic announced the commercial launch of a near-field communications (NFC) payment service in collaboration with the City of Pilsen and local transit company Plzenske Mestske Dopravni Podniky, allowing customers to pay for fares on public transport, book tickets for events, and make small purchases in participating shops.
The service uses MIFARE technology, developed by NXP Semiconductors to integrate a contactless Plzenska karta card that is already in use by over 230,000 inhabitants of the city, into a customised Nokia 6212 handset.
The Plzenska karta card has been in use since 2004, and has an established payment network. As well as its primary function as a prepaid card for use on the city’s public transport system, it also allows customers to use the card as an electronic purse to pay for goods and services of contractual partners, and purchase tickets for cultural events. It also doubles as a library card in the Pilsen City Library, as well as being used by a number of local companies as an “employee card” for monitoring employee attendance and enabling use of printers, and in some secondary schools to purchase cafeteria meals.
It was noted that integrating the card into a mobile phone will allow users to view balance and transactions details, on the handset display, via a Java application, rather than needing to visit special terminals.
The mobile service was originally presented at the GSMA Mobile World Congress in 2009, and has subsequently been through a number of trials (Telefónicawatch, 2009.02).
” During a trial run that started in April 2009, the NFC services were used by 50 users in total, who have given it a very positive evaluation. In particular, they highlighted the fact that they keep their handset handy all the time in fact, and therefore, there is no need to look for a card to make the payment. Another advantage, according to their opinion, is the possibility to display transaction history and balance directly on the handset display. If they were to choose between a standard ‘Plzenska karta’ card and an application of the same name in their handset, most of the trial users would prefer [the] mobile handset. ”
– Jiri Malik, Sales Director for Public Administration and Government, Telefónica O2.
The NFC handsets are available from 22 May 2010, priced from CZK 495 (EUR19) as part of a new contract or extension, or at CZK 4,495 on a stand-alone basis.
[Further reference: ‘Plzenska karta' card in a mobile now thanks to the unique NFC technology -- Telefónica O2 Czech Republic, 24 May 2010.]
Unicom launches NFC m-commerce service
The Beijing branch of China Unicom launched a NFC (Near Field Communication)-powered mobile commerce service in partnership with Beijing Municipal Administration and Communications Card Company (BMAC).
BMAC operates the Yikatong card, which is a contactless “stored value” card that can be used to make payments on the city’s buses, subway system, in taxis and in retail stores. It will be made available to mobile phone users either via SIM cards with built-in NFC antennas, or using two handset models which have the technology embedded.
Users will also be able to check balances and payment transaction histories from their handsets, and credit balances can be topped-up via the existing BMAC kiosks or over the-air.
[Further reference: China Unicom adopts SIMpass for mobile payments -- China Payments News, 9 June 2010.]
About Telefonicawatch
Issue: 2010.06
Covering: June 2010
Published: June 2010
Next issue: July 2010
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