Payter Expands Its Electronic Wallet

By Claire Swedberg

Oct. 24, 2007—Payter, a Dutch developer of mobile phone-based payment applications, launched a Near Field Communications (NFC) mobile phone payment pilot in August in Rotterdam. Now, following the success of that trial, Payter has begun doubling its participating consumers from 500 to 1,000. The company also plans to add more features, such as enabling the phone to be used as a loyalty card, and to download info from smart posters and receive parking vouchers.

"We've had a good experience with the first 500 consumers," says Remco Willemse, Payter's development and technology project manager. "So far, the users are pretty happy." Not only are they gaining comfort with the system, he says, but other shoppers watching them use it are showing interest in the technology as well. "That's the really interesting thing."

Remco Willemse

Payter initiated its electronic wallet pilot in Rotterdam as a first step toward achieving its goal of deploying a Europe-wide system within the next three years. Rotterdam was a logical place to start, Willemse says, because of the structure of its city center and its tradition of being a place where trends begin. The city is also where Payter is headquartered.

"Rotterdam is a good place to start NFC technology," Willemse says, "and it has a pretty centralized shopping center." Within a 2-kilometer area of the city, about 50 participating merchants have RFID interrogators for accepting payments from NFC-enabled phones.

The 1,000 consumers—who have already begun or will be participating in the next few months—are being provided with Nokia mobile phones embedded with NFC 13.56 MHz passive RFID chips from NXP Semiconductors. Each chip is encoded with a unique ID number for transaction purposes, and its 72-kilobyte memory is capable of holding merchant-related data such as discount information or coupons. Other data can be stored on Payter's back-end system.

Participants initially open a prepaid account with Payter, into which they can transfer a specified amount of money from a bank or credit card account. The account balance is stored on Payter's server, and account users can access that information through their phones or on the company's Web site. After a purchase is totaled at a point-of-sale (POS) device, a user shopping at a participating merchant can tap the phone against an RFID interrogator, and the cost of the purchase is automatically deducted from that shopper's prepaid account, managed on the Payter server. Payter is currently supplying merchants with RFID interrogators from OTI, though Willemse says the company is testing other readers as well.