Sep 11, 2008Members of the media and delegates at last month's Democratic Convention in Denver sampled a new NFC-enabled payment solution known as GO-Tag, supplied by electronic transaction services provider First Data Corp.. The company handed out commemorative badges that contained passive 13.56 MHz RFID tags complying with the Near Field Communications (NFC) standard, and functioned as $10 prepaid debit cards, to showcase how payments could be made without using a credit or debit card or cash.
The promotion, which included 5,000 pins, proved contactless payments could be made in non-traditional form factors, says Ginger Sayor, VP of product and business development for First Data Mobile's Commerce Solutions business unit. What's more, she adds, the technology also made transactions at the 100 point-of-sale terminals at the convention's concession stands faster and easier.
First Data, based in the Denver suburb of Greenwood Village, Colo., provides financial transaction data services worldwide. The majority of financial transactions made globally, in fact, include some type of First Data service. The firm provides authentication and fraud-protection services for merchants, banks and credit card companies through its STAR Network, and also supplies gift cards, loyalty cards and electronic check acceptance services through TeleCheck. Recently, the company began offering NFC options as well.
The company's NFC-based technology is in use by the Bay Area Rapid Transit (see link SF's Transit System Offers Commuters Fast Access to Subways and Sandwiches), as well as by the Colorado Rapids professional soccer team, in the form of a Rapids Kickback Card—an NFC-enabled loyalty card for soccer fans. The Kickback card includes a breakaway key fob that can be attached to a key ring or bag, tracking the spending of users at the stadium's concessions and box office. A user can then apply for such rewards as discounts based on the spending data linked to the ID number of the RFID tag embedded in that person's fob.
Food services provider Sodexo has also completed a trial of the GO-Tag, in two First Data employee cafeterias—one at the Greenwood Village office, the other in Hagerstown, Md. In this case, First Data employees use NFC-enabled stickers encoded with a unique ID number linked to their own prepaid accounts, connected through the point of sale or via a Web site. Employees can load and reload value either at the point of sale or online, and have the ability to automatically reload if the balance drops below a specific threshold. Data regarding their accounts is stored in First Data's server, and linked to their sticker's ID number. The stickers are then attached to the backs of the employees' badges.
When the Democratic Party opted to hold its 2008 convention in Denver's Pepsi Center, First Data decided it would be a good opportunity to showcase its services. "It was something we did because the convention was being held in our base city—and what better place to do it," Sayor says.
That number was transmitted to First Data's back-end system, where the service provider's software enabled the button's $10 balance to be linked to that GO-Tag's ID number. The payment was then approved and deducted from the amount of money in that sticker's account. If a balance still remained after the purchase, the same button could be reused another time. If, on the other hand, the balance for that GO-Tag sticker was not high enough to pay for the items being purchased, the customer would simply pay the remainder in cash.
Merchant employees wore buttons stating, "Ask me about GO-Tag," and provided help to those unfamiliar with contactless payments. "It was extremely well received," Sayor says, indicating members of the media, delegates and security guards all used the free $10 service. "We viewed it as an opportunity to give the media and the delegates a positive experience with contactless payments," she says. "We're all about driving usages of contactless devices."
The next phase for First Data is embedding GO-Tag NFC chips in mobile phones—similar trials have already been held by other companies around the world. Because American consumers commonly use credit and debit cards, they may be less inclined to try other payment technologies (such as those embedded in mobile phones) compared with shoppers in other parts of the world who have less attachment to the credit card format.
Still, Sayor says, the NFC market is going to have more penetration in the United States than in many other countries—and, in fact, many credit cards are already NFC-enabled. Introducing merchants and consumers to the variety of form factors in which NFC chips can be made available, she says, will make them become more accepting of mobile phone payments as well.
At present, Sayor says, First Data is still amassing data regarding the use of the GO-Tag buttons at the Democratic Convention. However, she adds, "Anecdotally, I would say it went off without a hitch. We were very pleased."
