Smart Cards, Smart Phones and a Cashless Society

Bank of America to Run NFC-enabled Mobile Payments Trial in New York

August 19, 2010

NearFieldCommunicationsWorld.com - Bank of America will begin a field trial next month in partnership with Visa that will enable customers to use their smartphones to pay for purchases in stores, according to a Reuters news report.

"The program, set to run from September through the end of the year in the New York area, is the biggest step yet by the biggest US consumer bank toward creating a 'digital wallet' with a host of financial capabilities built into the latest, most sophisticated mobile phones," says Reuters.

Reuters says only that "the program will allow selected New York-area employees and customers to install small chips in their smartphones that emit radio signals over very short distances." A MicroSD-based solution is most likely, given that Visa partnered with DeviceFidelity in February this year.

Bank of America ran its first NFC trial back in 2007 and industry rumours suggest that the banking giant hired IBM to custom build a Trusted Service Management platform some time ago. According to Reuters, however, the company is not revealing how large the pilot will be or which other companies will be involved:

For now, cell phone payments are used primarily for small-dollar, high-volume transactions — like cups of coffee or subway fare — that customers make every day, said Michael Upton, BofA's customer solutions executive for mobile banking.

"We want to learn how folks incorporate this into their day-to-day lives," Upton said. "But we do believe adoption happens at a pretty quick clip."

Federal Reserve is Key Player in U.S. Mobile Payments Market

August 18, 2010

NearFieldCommunicationsWorld.com - Almost from nowhere, interest in near field communication technology has exploded in the US over the last few weeks as key potential market players have begun to reveal their hands.

Mobile network operators AT&T, Verizon and T-Mobile are reported to be working on NFC with Discover Financial Services and Barclays. The US banks, on the other hand, are working with the Federal Reserve in a bid to come up with an NFC infrastructure that works for them and Visa is due to begin testing a microSD format NFC solution with US Bank later this year.

Online payments giant PayPal, meanwhile, has committed to a major move into the retail payments arena and is already field testing Bling Nation's NFC-ready mobile payments system and Apple has hired an NFC expert as its new product manager for mobile commerce.

Attention so far has focused on the implications of all this activity on the US payments market. What's really at stake, though, is far more than just a slice of merchants' transaction fees.

What's of most interest to these new entrants to the payments market — and to Google, Microsoft and others yet to show their hands — is NFC's advertising potential. By linking a consumers' transaction history to their current location, NFC offers the ability to deliver the kind of highly targeted, location based advertising solutions that marketers will pay top dollar for. And that could well turn out to be a market worth fighting over...

Verizon Invests in Mobile Loyalty and Coupons Specialist CardStar

August 20, 2010

NearFieldCommunicationsWorld.com - Verizon Ventures has invested US$400,000 in mobile loyalty card and promotions start-up CardStar, The Wall Street Journal reports:

CardStar is just one of many companies with an app to organize membership and loyalty cards. But the company differentiates by also offering a back-end system that functions like a portal for merchants. Merchants, no matter small, can launch their own promotions, discounts and loyalty programs with CardStar, alerting users to the deals via the application.

CardStar has 2,000 merchants — from major airlines and chain stores to mom-and-pop operations — signed on to use the system. Some of these merchants have point-of-sale scanners that can read bar codes, and others don't. The merchant portal offers various other options for merchants with low-tech point-of-sale systems.

The investment follows the news last month that Verizon Wireless has formed a joint venture with AT&T and T-Mobile to introduce NFC services in the US. The joint venture has partnered with Discover Financial Services and Barclays for payments services, but observers believe the companies' main focus is on the creation of a next generation advertising platform that would tie together consumers' transaction histories and their current locations to deliver highly targeted location based mobile advertising solutions.