Europe is following Japan’s lead in the roll-out of contactless payment technology, with France and the UK leading the way in the innovation stakes. Wendy Atkins reports.
Although France was an early European leader in contactless payments, the UK has moved ahead over the past couple of years. However, France is now back jostling for pole position with a number of innovative projects on display at the recent Cartes and Identification tradeshow in Paris.
French card manufacturer Oberthur Card Systems is participating in the French near-field communication (NFC) payment project – Payez Mobile – working with a consortium of six large financial institutions and four mobile operators, in collaboration with Visa and MasterCard.
MasterCard and Banque Accord have announced a six-month contactless trial in Englos, northern France, involving clothes store Bizbee and restaurant chain Flunch. MasterCard says this will lay the foundation for the national roll-out that is planned for 2009. Damien Guermonprez, CEO of Banque Accord, says: “The ability to reduce checkout waiting times by an average of 40% will undoubtedly be music to the ears of hypermarkets, specialised retailers and transport providers alike.”
Following Japan’s lead
Meanwhile, the Paris event put the spotlight on Japan – the undisputed champion of contactless payment roll-outs. According to the show’s organisers, about 30 million people – almost a quarter of Japan’s population – are equipped with a mobile phone containing contactless technology that enables them to pay for their shopping, take the train or bus almost anywhere in the country, access information or pay a restaurant bill.
The newest contactless phone payment application, Nanaco, was launched earlier this year in partnership with JCB by the Seven & I Holdings Co group, which has nearly 12,000 stores and restaurants. The payment and ticketing application – which already has nearly three million users – can be downloaded to any mobile phone running on the network of Japan’s second largest cell phone operator, KDDI.
Other developments include a collaboration between MasterCard, SoftBank Mobile Corp, Orient Corp, Samsung Electronics, Gemalto and Hitachi. The consortium announced plans during Cartes to launch Japan’s NFC-enabled mobile payment platform, which is equipped with MasterCard PayPass. As part of the trial, the contactless payment feature will be embedded on an NFC-capable universal subscriber identity module (USIM) card developed by Gemalto, which can be inserted into a SoftBank Mobile NFC-enabled handset developed by Samsung.
PayPass is also being delivered in other countries such as Canada, where the Bank of Montreal and German card manufacturer Giesecke & Devrient are partnering to deliver the payment technology to the bank’s customers.
Cartes also featured the usual flow of product and white paper launches. VeriFone unveiled its QX120, a contactless payment system that supports major contactless payment schemes, including those made from mobile phones using NFC. VeriFone says the device includes a large branding area and can be wall-mounted or used on a countertop.
Visa Europe has introduced multi-application cards. “We are starting to see more innovative ideas as the industry explores the true technical capabilities of the chip,” says Sandra Alzetta, senior vice-president of innovation and acceptance at Visa. “These include contactless cards combined with debit and credit functionality as well as offering debit and credit on one card.”
MasterCard also followed a similar route with its unveiling of an integrated contact and contactless EMV chip card payment application that supports both M/Chip 4 and PayPass for issuing banks using the Multos smart card platform.
Security concerns
Xiring addressed consumer concerns about the security of contactless payments with its new CL Watcher, which it says blocks contactless card functionality until the consumer unequivocally confirms a payment. If the card is kept in the device, the consumer must make a payment by holding the CL Watcher close to the contactless antenna and pressing the button to deactivate the blocking function. Once the transaction is completed, the device displays the amount paid.
CL Watcher, CEO of Xiring, says he is expecting this to be adopted primarily in Europe: “We are embarking on a business development tour to market the product within the next year. We anticipate European contactless payments will take off in 2008, especially in the UK. Accompanying this, contactless issuers will have to address consumer queries and concerns about how the technology works and how safe it is.”
The company is still evaluating several business models. “The CL Watcher can be deployed by banks wishing to reassure their customers adopting contactless payment cards and we are also considering selling it directly to the consumer through retail outlets,” says Mr Liberman. He adds that Xiring expects the CL Watcher to be sold to end users at a retail price of about €15 to €20.
