Archives - Oberthur Technologies brings smart card technology to SocGen Romania sub BRD

By Raphael Michilis
26 April 2012
Oberthur Technologies has inked a deal with BRD, Société Générale’s subsidiary in Romania, to provide new payment technology for the bank’s card portfolio.

Oberthur will supply BRD with a multi-application dual interface payment card, which has built-in capabilities for transport, access control as well as contactless payment options, based on MasterCard’s PayPass.

The MultiPass Transport card is one of the products originated from this deal. Issued in collaboration with RATB and Metrorex - the transport operators of Bucharest - the transport card will allow commuters to simply wave their card in front of validators on buses, tram and metro.

“Such multi-application payment cards combining services used everyday, like usual payment and public transport access, or linked to their preferences, hobbies or lifestyle, enable us to strengthen our relationship with our existing customers, while attracting new ones,” said Ciprian Nicolae, projects director-cards department at BRD.

“We are now proposing to our customers packaged offerings targeting precise markets such as transport, universities, sport fans, corporate badges, or frequent flyer cards,” said Eric Duforest, managing director Europe at Oberthur Technologies.

Additionally, the two companies will bring out a football card called Supporter Card. This will be in co-operation with several Romanian League 1 football clubs and will grant access to stadiums, where turnstiles are fitted with contactless technology.

The Support Card can be personalised using a design from a gallery on the BRD website or by uploading a personal photo.

BRD customers can also make contactless payments using stickers attached to the back of their mobile phones.

About 95% of the UK population have never used a contactless card

By Raphael Michilis
10 May 2012
Only 5% of British consumers have used a contactless card, although 14% of the population own a card fitted with the contactless technology, revealed a recent study by international market researcher Mintel.

While around 8% of interviewees said they would immediately use contactless payments if they could, the research says consumers are not happy in being issued a contactless card without their request.

Mintel found out that 62% of the contactless card holders in the UK think it is a “more convenient” method of payment, while 28% were indifferent and 9% disagreed.

Mintel surveyed 2,000 people in the UK, and estimated that 9m British consumers are aware of the contactless capability on their card, while 3.8m “aren’t sure” they have one, said a company’s spokesperson.

“Consumers are still wary of contactless card payments, and compulsory upgrades risk further undermining consumers' goodwill towards the banks. There is anecdotal evidence of disgruntled customers closing accounts rather than have to carry a contactless card. If they only realise that they have been issued with this card months after the event, the reaction will be even less favourable,” said Toby Clark, head of UK Financial Services at Mintel.

Security is a big concern among the respondents, with 64% having said they worry about the use of a mobile instead of a payment card, and 58% being apprehensive about contactless cards.

“For those who have been issued with a card, though, it’s not security that’s preventing people from using contactless cards. Instead, it’s the limited acceptance and a lack of a compelling reason to switch from chip and PIN,” added Clarck.

The research in numbers:


43% of those using contactless cards had used the feature just a few before the Mintel.

62% of smartphone users and 71% of tablet owners would consider using contactless payment technology.

72% of consumers think think contactless cards should only be issued on request.

Pagseguro, Nokia bring NFC payments in Brazil

By Raphael Michilis
20 April 2012
Brazil’s first commercial NFC mobile payment application will commence in May.

The electronic wallet has been developed by the Nokia Institute of Technology (INdT) in Brazil, and will be available on Nokia’s C7, N9 and 701 smartphones, the Finnish company told.

The solution will be offered in partnership with Pagseguro, a payments company that belongs to UOL, one of Brazil’s largest internet service providers. 

The app enables both retail payments - at bars, restaurants and stores – as well as proximity-based money transfer between users.

Instead of a POS, the Nokia-Pagseguro service requires both merchant and consumer to have a handset with the same application installed.

“The money will be withdrawn automatically from a credit card account, a PayPal account or from any of the other supported payment types”, said Nokia.

Mobile commerce specialist David Eads, founder of Mobile Strategy Partners LLC, is optimistic about the future of m-payments in Brazil and complimented the Nokia initiative in the country. 

“The PagSeguro pilot is interesting because it ties P2P technology to the leading payment products in Brazil. This enables broad payment acceptance from anyone with the application. Unlike other pilots, it also removes the complication of merchant POS hardware,” says Eads. 

“Closed networks like these with economic incentives have a history of succeeding in various emerging markets. For example, BlackBerry Instant Messenger (BBM) thrives in Venezuela because it avoids text messaging fees. Usage exploded because of the network effect once it reached critical mass,” he points out.

He says the economic boom that the Latin American markets are experiencing provides a rich ground for the mobile payments market to grow.

He estimates that there are between 30-40% of consumers across Latin America who are underserved by banks – and this is where mobile money initiatives can generate revenues by serving this segment, he says.

Security

Pagseguro says that rather than being completely automated, the Nokia app will always request the user to enter a passcode before each individual transaction.

“So, in case the handset is lost or stolen, nobody will be able to make payments in the user’s name,” the company explains on its website.

“The recipient types in the amount they are to collect and taps their phone against that of the sender. The amount is shown on the sender’s screen and the transaction can be completed, when both parties agree”, Nokia says.

According to Pagseguro, the extension of the service to other brands will depend on phone makers adapting their handsets to the NFC technology. Nokia sells three NFC enabled models in Brazil: N9, 701 and C7.

Regulation

“The Central Bank of Brazil (BCB) and the Brazilian Communications Ministry are discussing the regulatory aspects of financial inclusion and the security requirements mobile payments in the country,” Aldo Mendes, head of monetary policy for BCB said during Cards 2012 in Sao Paulo in mid-April.

“Mobile ppayment is a global trend with potential to bring sensible benefits to society, with reduction in costs and price, better convenience to users, and improvement of the service standards through the increase of competition.”

“The costs to bring people into the financial system through mobile payments are much lower than expanding the number of bank branches and other solutions that need physical investment in infrastructure, people and other technologies,” Mendes said.

An official outline for the Brazilian mobile payments regulation might be announced in about 90 days.

The Brazilian mobile payments regulation will also guarantee the universality of the service, imposing rules that prevent barriers to new entries, according to Mendes.

Banks and mobile operators will be free to enter the market. Business models will have to permit interoperability “to allow different platforms to communicate amongst each other”, so that different models do not represent a barrier to business,” explained Mendes.

He added that the coming regulation will also ensure:

• Adaptability, so that “new technologies allow the current payment modalities to co-exist with m-payments”;
  
• That contracts and technologies for m-payments in Latin America’s largest country will have the flexibility to allow users to migrate to different operators and handset makers;
  
• The prevention of money laundering and protection of consumers’ rights.