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O2 Subscribers Use Phones to Make Purchases, Access Info

As part of a six-month pilot project, Londoners are using NFC-enabled cell phones to pay for goods and services, read smart posters, download special offers and program RFID tags.
By Mary Catherine O'Connor
Dec 13, 2007Cellular service provider O2 UK is working with British credit card issuer Barclaycard, as well as Nokia, Visa Europe and other partners, in a project to test the O2 Wallet, an application in which consumers use their mobile phones to purchase goods or services, such as transit fares, and access information over an Internet connection. The scheme is powered by Near Field Communication (NFC), an RFID protocol that employs high-frequency (HF) tags and readers to exchange encrypted payment or other data.

The pilot began at the end November and, according to O2, will run until May 2008. All 500 participants, recruited by O2 though an e-mail and phone campaign, are existing O2 subscribers, as well as regular users of the Oyster Card, an RFID-based fare payment card used by more than 10 million British commuters in the city's subway and bus system. Each O2 participant receives £50 ($101) in Oyster funds and £60 ($121) worth of O2 wireless phone service. A subset of 225 participants are also being provided with a prepaid Visa Barclaycard account, installed on the phone and funded with £200 ($403). These participants can use the Barclaycard funds to make purchases of £10 ($20) or less, until the account is depleted, by holding their test phone up to payment terminals at merchant locations that accept Visa's PayWave RFID payments.

Each Nokia test phone contains an NFC module enabling it to communicate with RFID interrogators mounted in transit turnstile gates, as well as point-of-sale terminals at locations that accept Oyster or PayWave payments, because the NFC phone acts just like an RFID payment card when communicating with an RFID reader linked to a payment terminal. Each participant's Oyster account information and, if applicable, Barclaycard account information is loaded onto the O2 Wallet application running on the Nokia 6131 handset issued for use during the pilot. The account information is transmitted to the phone's O2 Wallet application via an over-the-air provisioning system created by Venyon. Once the data is sent to the O2 Wallet, a data management application made by Giesecke & Devrient encrypts the data so financial transactions are secure and payment data cannot be stolen by a third party.

All participants can also download a VIP pass to the Blueroom, a members-only bar inside The O2, a sports and entertainment arena in London, by holding up their phone to an NFC-enabled smart poster at the club's entrance. The phone's NFC module acts as an interrogator, collecting the URL encoded to the smart poster. The O2 Wallet application then visits that URL and downloads the VIP pass, which participants can show to the bar hosts. Anschutz Entertainment Group (AEG), which is The O2 arena's parent company and operator, developed this portion of the pilot. AEG is interested in learning how it could employ NFC handsets and smart posters as part of its service offerings.

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