Major step towards a global interoperable mobile payments system
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. 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.
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.
“We are proud to be the first operator in the world to trial this global payment scheme”, said Young-Chu Cho, CEO of KTF, a leading HSPA operator in Korea, “We have been working diligently to deliver more than mobile values to our customers and NFC M-Payment is definitely a step forward in realizing our vision.”
“By adopting the global standard, experiences and technology, we aim to trigger our domestic NFC related industries to align with global standards and develop more advanced services and products to energize the telecommunications category. We are glad to join this global payment scheme trial to demonstrate cross-border interoperability,” said Mr. Jan Nilsson, President of Far EasTone Telecommunications.
“Australia is experiencing a wireless revolution with the highest growth rates in the world. Telstra is working with one of the country’s leading banks and a global credit card provider to make it easier for customers to pay for goods and services with their mobile phones with a trial to begin early next year,” said Sol Trujillo, CEO of Telstra.
“In Europe, Orange is a pioneer in promoting high-scale trials in association with a large number of banks, major financial institutions and key MNOs to launch interoperable mobile contactless payment services,” said Mung-Ki Woo of Orange, VP Payment and Contactless. “Orange has announced trials in the UK and a commercial launch in France in 2008, that will include not only payment but also transport ticketing, football stadium ticketing, and interactive billboards with key service partners.”
“AT&T was the first carrier in North America to participate in a large-scale NFC contactless payments trial in 2005,” said Mark Collins, VP of Consumer Data Services at AT&T Mobility. “Even from our early efforts in this space, we’ve seen the value of engaging a broad ecosystem to drive standards and promote the adoption of mobile payment services. We are excited to build on our early work in this space and to play a role in establishing global standards for mobile payments”
“Maxis’ participation in GSMA’s global Pay-Buy-Mobile trials is a significant milestone in our overall Mobile Payment strategy, which we launched as Maxis M-Money in early 2007,” said Dr Nikolai Dobberstein, Head of Products and New Businesses of Maxis Communications, Malaysia’s largest mobile telecommunications operator. “Maxis, currently the only Malaysian mobile operator participating in the Pay-Buy-Mobile trial, has already rolled out a number of mobile payment services, including Mobile International Remittances. Maxis is also conducting trials for a hybrid multi-payment mobile service for credit card and prepaid travel payments, incorporating NFC technology.”
“SFR, a leading HSPA MNO in France, has already conducted several trials in the field of mobile NFC services, focused both on transportation ticketing and m-payment. SFR is also currently testing multi-applicative NFC services in Strasbourg, combining a credit card payment application and a transportation application that customers are able to use in the trams and buses,” said Mireille Poggi, Mobile Payment & M-Commerce Marketing Manager of SFR. “As we believe strongly that interoperability will be key regarding mobile NFC acceptance by customers and service providers, SFR is in the meantime an active member of Pegasus, a global French initiative, including both major MNOs and banks, aiming at defining an interoperable setup in payment.”
“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.”
Download the mobile NFC technical guidelines (2.5MB pdf)
Download the Pay-Buy-Mobile Version 1.0 November 2007 Business Opportunity Analysis Public White Paper (785kb pdf)
Notes to Editors:
The 12 operators running trials include AT&T, Far EasTone, Orange, KTF, Maxis, SFR, SingTel, Smart, Telstra and Turkcell.
*The GSMA has contributed to the adoption of mobile NFC standards by the European Telecommunications Standards Institute (ETSI) and is working with other industry groups, such as the NFC Forum and the Mobey Forum, to secure agreement around a single global approach for enabling mobile payments.
The GSMA has published two white papers on www.gsmworld.com, one of which sets out several business models that can support a mobile payment service and one of which sets out version two of the GSMA’s technical guidelines for NFC.
The Pay-Buy-Mobile initiative builds on the infrastructure of the major credit card companies, which have developed specifications to ensure global interoperability between contactless chip cards and point of sale terminals, regardless of manufacturer, the financial institution and location of transaction.
The GSMA is working closely with leading financial intermediaries and banks to promote globally interoperable transaction solutions. Both MasterCard and VISA are supporting the trials with their PayPass and Visa payWave features respectively, that enable NFC-equipped phones to effect payment transactions at secure contactless point of sale terminals.
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.
About the GSMA:
The GSMA (The GSM Association) is the global trade association representing more than 700 GSM mobile phone operators across 218 countries and territories of the world. In addition, more than 200 manufacturers and suppliers support the Association’s initiatives as key partners.
The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association’s members serve more than 2.5 billion customers – 85% of the world’s mobile phone users.
For more information please contact:
For the GSM Association:
Mark Smith or David Pringle