Mobile industry champions paying with phones

A man takes pictures with his mobile phone at the Mobile World Congress in Barcelona
A man takes pictures with his mobile phone at the Mobile World Congress in Barcelona on February 29, 2012. Paying with a mobile phone is gradually become a reality for consumers, with banks, telecommunications operators and Internet players all jumping in to offer payment options.

Paying with a mobile phone is gradually become a reality for consumers, with banks, telecommunications operators and Internet players all jumping in to offer payment options.

But while one group is pushing for a system of payment through an electronic wallet hosted on the web, another is investing in an infrastructure that would allow customers to pay by swiping their phones against a reader.

The latter, championed by Internet giant and like Orange and Vodafone, is made possible by so-called Near Field Communication technology.

It requires buyers to have specially equipped telephones, while sellers need to have new installed. Yet it is the method preferred by both operators and banks, and particularly appears destined for developed countries.

At the world's biggest mobile show in Barcelona in the past week, several previewed telephones compatible with NFC, while chip makers Gemalto, INSIDE Secure or STMicroelectronics all demonstrated their solutions for mobile phone payment.

However, "despite the large scale trials and some other announcements, we are far from a massive utilisation by consumers, neither are we seeing deployment on an industrial scale among sellers," lamented Patrick Flamant, manager at internet payment operator Ogone.

Analysts say that payment by NFC telephones may be eclipsed by other methods that consumers find more handy -- public transport cards, identification badges or store cards.

"For me, NFC will never take off because I believe more in via social networks -- Facebook credit or PayPal," said Gilles Blanc, Benchmark group's research director.

Indeed, Internet payment specialist PayPal already has 106 million active online users, and mobile payment is already a reality with $4 billion in transactions made in 2011 and $7 billion worth expected in 2012.

Under PayPal's system, a buyer can scan the item and pay by phone using his or her PayPal account.

"It is important to follow our users everywhere where they are buying," said PayPal mobile vice president David Marcus.

"We are now investing in physical boutiques," he said, because "we offer solutions for whatever the payment method."

Starting this week, the group has begun allowing customers of US chain Home Depot to pay with PayPal in 2,000 locations across the country.

US credit card giants Visa and Mastercard have meanwhile chosen to invest in both methods of -- NFC and its sophisticated telephones as well as mobile payments with basic telephones, which would be better adapted for developing countries.

"Mobile is a channel which allows many different things accross different markets," said Hannes van Rensburg, who heads Visa's unit for emerging markets.

Orange Money, a subsidiary of French operator Orange, has also signed a deal with Visa to offer pre-paid accounts in seven African countries and Middle East for mobile clients -- many of whom have never had a bank account -- to pay with their telephones.

Mastercard has also partnered with banks or operators to offer mobile payments.

"It's not so much about technology but to make an experience proposition for the consumer better, more secure and faster," said Santander Card manager Javier Herraiz, a partner of Mastercard.

(c) 2012 AFP

Citation: Mobile industry champions paying with phones (2012, March 4) retrieved 19 March 2024 from https://phys.org/news/2012-03-mobile-industry-champions.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.

Explore further

World's first NFC enabled mobile product for contactless payment

0 shares

Feedback to editors