Smart Cards, Smart Phones and a Cashless Society

Schmidt: Mobile Money is a Key Part of Google’s Strategy for 2011

January 20, 2011

NearFieldCommunicationsWorld.com - Writing in the Harvard Business Review, Google chairman and CEO Eric Schmidt has explained that mobile money is one of three key areas of focus for Google in 2011.

"As I think about Google's strategic initiatives in 2011, I realize they're all about mobile," he explained. "We are at the point where, between the geolocation capability of the phone and the power of the phone's browser platform, it is possible to deliver personalized information about where you are, what you could do there right now, and so forth — and to deliver such a service at scale."

"But to realize that vision, Google needs to do some serious spade­work on three fronts," he added.

The three are the development of high speed LTE mobile networks, the development of inexpensive smartphones for the poorest parts of the world and mobile money.

"We must attend to the development of mobile money," says Schmidt. "Phones, as we know, are used as banks in many poorer parts of the world — and modern technology means that their use as financial tools can go much further than that."

In December, Google included support for NFC in the Android 2.3 Gingerbread operating system and near field communication functionality is also included in the Nexus S smartphone. The company launched its first NFC marketing service in Portland, Oregon the same month.

The company is also expected to make a move into the NFC mobile payments market soon. Google has recently acquired NFC specialist Zetawire and is currently on the hunt for a 'Technical Account Manager, Mobile Commerce' who will be involved in building partnerships with merchants, card issuers and POS solution providers.

Most French Consumers Not in Favour of Mobile Payments

January 20, 2011

NearFieldCommunicationsWorld.com - Despite plans for a major expansion of the high profile pre-commercial NFC trial in Nice and Orange's ambitions to sell 500,000 NFC phones this year, a survey of French consumer attitudes has found that the majority are not in favour of using a phone to make payments.

A new survey of French consumer attitudes to electronic payments has found that the majority are not currently interested in mobile payments services, despite recent government funding for the expansion of the Nice Cityzi pilot to eight more cities and plans by Orange to sell 500,000 NFC phones in France this year.

The survey, conducted for Wincor Nixdorf by Ifop, asked 1,025 consumers if they were for or against the idea of making payments with their mobile phone:

• Only 8% of consumers were strongly in favour of the idea.
• A further 33% were quite in favour of the idea.
• 19% were strongly opposed to the idea of making payments with a mobile phone.
• A further 40% were quite opposed to the idea.

The 41% of consumers who were for the idea gave their reasons as:

• Simplicity (82%)
• Speed (51%)
• Security (17%)
• Other reasons (2%)

The 59% of consumers who were against the idea, meanwhile, gave their reasons as:

• Security (79%)
• Cost (29%)
• Complexity (21%)
• Other reasons (12%)

Other emerging payments technologies also proved to be less than a hit with French consumers. The percentage of respondents who said they would take up the option of a contactless card was only 41%, for instance, while just 19% said they would be interested in a mobile remittance service that would let them use their handset to send funds to another person's mobile phone.

The full survey findings include a breakdown of how different demographic groups responded to each of the questions. Readers can download a PDF of the full survey, in French, from Wincor Nixdorf's website.

Sitges Trial Results: Consumers Pay More Often and Spend More with NFC Phones Than with Cards

January 7, 2011

NearFieldCommunicationsWorld.com - Telefónica, la Caixa and Visa's NFC payments trial in the Spanish resort of Sitges has seen significant increases in both transaction frequencies and purchase values but, the partners say, a mass deployment of NFC services is still three to five years away.

The six month trial of NFC mobile payments which has been taking place in the Spanish resort town of Sitges since the end of May 2010 is now complete and the results of a survey of participants in the trial have now been released.

For the trial, more than 1,500 customers of both mobile network operator Telefónica and La Caixa bank were equipped with Samsung S5230 NFC phones loaded with la Caixa Visa cards and 500 merchants in the town were equipped with contactless POS devices capable of handling NFC payments.

The results of the Mobile Shopping Sitges 2010 project "indicate that the project was highly successful among all the participants", say the project partners, and both the NFC phones and payment terminals used in the trial are to be left in circulation so they can continue to be used on an on-going basis.

Research conducted amongst consumers and merchants who participated in the trial found that:

• Customers used the Visa cards stored on their NFC phones to carry out 30% more transactions, with a 23% increase in the average purchase value, than they had with their traditional plastic cards.
• 90% of consumers issued with an NFC phone used their phones to make payments
• 80% of the merchants taking part in the project processed an NFC transaction
• Users mostly made micro-payments with their phones: 60% of the purchases were for amounts equal to or less than €20, although there were also many for large amounts.
• 75% of transactions took place during the working week.
• Consumers made the largest number of purchases at supermarkets (57%) and restaurants (14%).
• The average age of customers using their mobile phone to pay for their purchases was 46.
• 85% of users said they considered the protocols for operating with the NFC system to be sufficiently secure.
• 90% of users said they would continue to use their mobile phone for payments.

"The results obtained in Sitges reinforce the assumptions of the companies behind the project that mobile payment could be rolled out massively in Spain over the mid term," say the partners, "in the next three to five years."

There is, however, no word as yet regarding an expansion of the Sitges project to include the city of Barcelona, 35km along the coast from the resort, which was originally expected to follow the initial six month pilot.

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