Cell Phone Service Providers Start Global NFC Initiative

By Claire Swedberg

Feb. 6, 2008—The GSM Association, a group composed of more than 700 GSM mobile phone operators around the world, has launched a Near Field Communication (NFC) mobile phone pilot, Pay-Buy-Mobile, in France, Taiwan and Turkey. The group plans to expand the trial to eight more countries this year.

The project is part of the GSM Association's effort to provide a single approach to contactless payments that can be used by mobile network companies worldwide. By the end of 2008, the pilot will also be underway in Australia, Ireland, Korea, Malaysia, Norway, the Philippines, Singapore and the United States, involving a total of 35 mobile service providers.

Jean-Philippe Betoin

In each pilot, local banks and credit card companies are partnering with the mobile service companies and phone manufacturers to provide a sample group of customers with NFC-enabled mobile phones from a variety of manufacturers, to be used for retail payments. The phones with MicroRead NFC chips are provided by Inside Contactless, enabling consumers taking part in the pilot to use their phones to purchase goods and services at participating vendors.

In the second quarter of 2007, the group began seeking NFC-enabled phones with built-in NFC chips, as well as a Universal Integrated Circuit Card (IUCC), commonly known as a SIM card, connected by a single-wire protocol (SWP) connection. The SIM card stores the data required for the transaction, such as the subscriber's identity, allowing the mobile phone to be used similarly to a credit or debit card.

The first pilot, known locally as Payez Mobile, commenced in the second quarter of 2007 in Caen and Strasbourg, France, using Motorola and Sagem Télécommunications handsets with built in MicroRead NFC chips and SIM cards provided by Gemalto and Oberthur Card Systems. Mobile phone service provider France Telecom is overseeing the pilot, which includes 500 participants and 200 retailers, according to Jean-Philippe Betoin, Inside Contactless' strategy and device marketing VP.

Retailers are using point-of-sale (POS) devices with NFC readers supplied by Sagem. Local banks BNP Paribas, Crédit Mutuel, Société Générale, Caisse d'Epargne, Crédit Agricole and abanquepostale.fr La Banque Postale are participating with MasterCard and Visa.

In Taipei, Taiwan, telecommunications company Far EasTone is conducting a similar pilot, Beep N Go, which began in November 2007 with 200 consumer participants using a variety of phones equipped with Gemalto SIM cards. Far EasTone expects to move to full deployment by the end of 2008.

In Turkey, mobile provider Turkcell is conducting a pilot with Garanti Bank. E-Kart Electronic Card Systems, in collaboration with Giesecke & Devrient, is providing the SIM card for the mobile phones. In the pilot, 100 Turkcell and Garanti employees have been furnished with NFC-enabled phones they can use at participating markets.