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May 7, 2008updated 04 Apr 2017 4:18pm

Contactless payments achieve global interoperability

Contactless payments achieve global interoperabilityA milestone in the advancement of contactless payments was reached in November when, in a world first, executives from Korean mobile phone service operator Korea Telecom Freetel (KTF) attending the Mobile Asia Congress in Macau used near field communication (NFC)-equipped handsets to execute contactless payments for goods in Korea, Taiwan and the US The retail outlets were equipped with readers that accept MasterCards PayPass applications.The demonstration in Macau was in support of mobile phone operator body the GSM Associations (GSMA) Pay-Buy-Mobile initiative, designed to provide a single global approach to enabling contactless payments using a mobile phone

By EPI editorial

Contactless payments achieve
global interoperability

A milestone in the advancement of contactless payments was reached
in November when, in a world first, executives from Korean mobile
phone service operator Korea Telecom Freetel (KTF) attending the
Mobile Asia Congress in Macau used near field communication
(NFC)-equipped handsets to execute contactless payments for goods
in Korea, Taiwan and the US. For the demonstration, MasterCard’s
PayPass contactless application and Korean bank Shinhan Bank’s
credit card application were used. The retail outlets were equipped
with readers that accept MasterCard’s PayPass applications.

The demonstration in Macau was in support of mobile phone operator
body the GSM Association’s (GSMA) Pay-Buy-Mobile initiative,
designed to provide a single global approach to enabling
contactless payments using a mobile phone. The GSMA said the
demonstration also marked the start of a series of trials to be run
over the next several months by 12 mobile phone operators in
Australia, France, Ireland, Korea, Malaysia, Norway, the
Philippines, Singapore, Taiwan, Turkey and the US.

“Just nine months after this programme was launched in Barcelona,
the first pioneering mobile operators are preparing for the
roll-out of commercial services that have the potential to become
the foundation of a global, interoperable mobile payment service,”
said Rob Conway, CEO of the GSMA.

MasterCard and Visa are supporting the trials with their respective
PayPass and Visa payWave contactless systems.

Support of GSMA

For the Pay-Buy-Mobile initiative, the GSMA threw its weight behind
the use of the single wire protocol (SWP) developed by French
subscriber identity module (SIM) card vendor Gemalto to link the
Universal Integrated Circuit Card (UICC) contained in the mobile
handset with the phone’s embedded NFC chip. The UICC stores secure
personal data and the SIM application.

In October 2007 the European Telecommunications Standards Institute
adopted the SWP, one of eight possible solutions, as the standard
for use in NFC-equipped mobile devices.

The mobile phone as a platform for contactless payments appears to
have a bright future, according to a survey undertaken for the GSMA
by research company Serrula. Two-thirds of the 2,574 consumers in
17 countries surveyed said that they expect to begin using their
mobile phone to pay at the POS within two years of the service
becoming available. In addition, one-half of the 240 merchants from
ten countries surveyed saw promotional opportunities in using the
mobile phone as a payment device.

The GSMA represents about 700 mobile phone operators serving a
total of 2.5 billion customers in 218 countries. There are 35
mobile operators with 1.3 billion customers participating in the
GSMA’s contactless payments initiative.

According to the GSMA, key players in the sphere of NFC mobile
phone technology development include manufacturers LG, Motorola,
Nokia, Sagem and Samsung. Among the UICC card suppliers supporting
NFC-enabled mobile payment services are Gemalto, Giesecke &
Devrient and KEBT Technology.

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