Vodafone and BNZ trial Near Field Communications
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Vodafone and Bank of New Zealand have begun an in-house trial using near field communications (NFC) to enable payments via a mobile device.
NFC is a short-range wireless technology similar to RFID. Vodafone claims it is the first time in New Zealand a “secure credit account element” has been embedded into a SIM card - the Secure Element (SE) is equivalent to the 'chip' on a chip credit card.
The trial involves 44 staff members from both companies and runs until the end of February. Also taking part are Visa and Paymark. Participating retailers are cafes located inside Vodafone’s headquarters in Auckland and BNZ’s headquarters in Wellington, hence the codename, ‘Project Espresso’.
Today Vodafone mobile marketing innovations manager Bridget Gallen bought Computerworld a coffee using her NFC- enabled Samsung Galaxy SII handset (these handsets have been sourced especially for the trial).
Gallen pointed the back of the device at the electronic reader, the transaction was accepted and about a minute later a pop-up alerted her to the fact that a virtual receipt was now electronically stored in the ‘mobile wallet’ app.
Gallen says Vodafone expects to go to market with the technology in 2013 when NFC-enabled devices become more common.
“NFC devices will become much more readily available in 2012 and beyond,” she says. “RIM, Samsung and Nokia, [have] all been talking about NFC being in their device roadmaps.”
Vodafone general manager for wholesale and business development Steve Rieger says that Vodafone NZ is among half a dozen divisions in the Vodafone group internationally to be trialling NFC devices.
Experiences overseas show that its necessary to create an ecosystem around NFC devices, to ensure ubiquitous standards, he says.
“Standards are really important for this to take off, we as telcos need to speak the same language to the banks,” he says, and build “a single application that goes across all handsets regardless of what network you’re on, but [it must] also follow standards from overseas.”
“New Zealand is too small for multiple ecosystems because the cost of integration will be significant, so the general belief is - and it's being played out around the world – we all agree a set of standards as to how an ecosystem looks.”
He says in the Netherlands an industry-wide partnership between three telcos and three banks has been formed to launch mobile NFC.
So has Vodafone spoken to Telecom and 2degrees in New Zealand?
“As an industry we chat about things all of the time, it hasn’t got mega traction,” he says.
Vodafone has teamed up with BNZ for the trial because it holds the Vodafone corporate account, but Rieger says he would like to see other banks get involved as NFC will enable faster transaction speeds and will lower the cost of delivering credit card services.
Rieger says that because the payment transaction isn’t carried across Vodafone’s network the telco can’t bill for the service.
So why get involved in it?
“It creates mobile centricity,” he says, that is, the more uses for a mobile the better it is for a telco.
However, the real opportunity for Vodafone is in mobile commerce. Rieger says a new revenue stream will be in the peripheral opportunities, such as the discount coupons that merchants will text their loyal customers.
In addition to paying for items via a credit card account, in time people are may have loyalty cards, gym memberships, office security access, transport payment methods such as Snapper – everything that is currently carried around in a wallet, will be an app on the mobile phone.
If the device is lost, a customer would only need to make one phone call to automatically disable all accounts.
“By having it in the SIM we [telcos] can manage security over the air - turn people on and off, update them and add new applications,” Rieger says.
There are two approaches to the secure element, which is required for banking applications. By using the SIM as the secure element is adds an extra layer of security as OTA updates can be applied by the network immediately, enabling or disabling the secure element.
Posted by Anonymous at 7:57:10 on November 30, 2011
Posted by Mark L at 14:10:03 on November 30, 2011
Posted by Dave at 20:35:02 on November 29, 2011
Can I suggest that if you don't have anything constructive to say then you need to just shut the hell up and stay out of the discussion.
Posted by Mark L at 14:07:28 on November 30, 2011
Posted by paulw at 12:54:03 on November 28, 2011
Posted by Mark L at 15:59:31 on November 28, 2011
Posted by Cloudy computing at 17:03:50 on November 28, 2011
Google wallet does all that without the need for any extra hardware, beyond a standard SIM and an NFC capable phone, so why can't Vodafone and the BNZ? It's as I said - they're only interested in STALLING progress whilst presenting the illusion of actually fostering it.
Posted by Mark L at 17:18:00 on November 28, 2011
"By having it in the SIM we [telcos] can manage security over the air - turn people on and off, update them and add new applications," Rieger says
Posted by Paul at 8:58:49 on November 29, 2011
If my phone gets nicked, then its exactly the same as if my wallet gets stolen - and should be handled in exactly the same way.
The point of NFC is that the telco SHOULD NOT be involved. Otherwise, it would just do stuff over the mobile network wouldn't it?
Nice idea, in danger of being ruined by Vodafone wanting to make money off of it when they don't even need to be involved!
Posted by Mark L at 11:18:35 on November 29, 2011