[IMGCAP(1)]PARIS-Start-up technology vendor Zenius Solutions Inc. has developed a way to add contactless credit and debit card payment capabilities to smart phones and link the transaction functions to the mobile devices' operating systems.
The application would work with MasterCard Worldwide and Visa Inc. contactless credit and debit cards and with contactless credit cards from American Express Co. and Discover Financial Services.
A number of financial companies have tested phones with built-in Near Field Communication chips that deliver contactless payment capabilities, but very few of these devices are available for sale. As a bridge, some companies are selling stickers that have contactless-payment features and are commonly attached to phones, but they do not actually communicate with the mobile devices.
Zenius' chief technology officer, Ming-Li Liu, calls its product an "NFC add-on." The Redding, Calif.-based company demonstrated the payment tool two weeks ago at the Cartes and IDentification conference here.
The product has two components. One part fits into a phone's existing SIM card slots and is linked by a flexible cable to another section that includes the NFC chip and antenna and that can be attached to the outside of the phone. Zenius developed the software, and Bladox SRO of the Czech Republic created the hardware.
The setup enables users to make contactless payments at the point of sale and manage their various card accounts through a mobile-wallet application that consumers can install on smartphones such as Apple Inc.'s iPhone or Research in Motion Ltd.'s BlackBerry devices.
The system could appeal to consumers who already are using smartphones and might not be interested in replacing them when new models are available with built-in NFC chips, Liu said.
"If you have a BlackBerry or iPhone, you are not going to switch to another phone," Liu said.
Though NFC-ready phones are rare now, some observers said at the show that Nokia Corp. and other handset makers could make the feature more common next year.
"We're almost there," said Jeremy Belostock, Nokia's head of NFC.
Many of the previous tests of NFC mobile payments have used Nokia phones. The paucity of other vendors selling similar handsets, and skepticism about the business model for the technology, have hampered progress.
James Davlouros, a MasterCard Worldwide vice president and business leader who oversees its mobile-payment efforts in Europe, says the card company is talking with mobile-handset vendors besides Nokia about offering "a few more [NFC] handsets" to consumers. Davlouros would not name the vendors, and he tempered his optimism by saying the number of handsets would remain "limited" for the time being.
Philippe Martineau, executive vice president for NFC at French technology company Inside Contactless, said it has been about seven years since the NFC concept emerged and that new technologies typically have a "seven-year gap" between concept and commercial rollouts.
Kai Grassie, group senior vice president for the German card vendor Giesecke & Devrient GmbH, said the gap sometimes reaches 10 to 15 years, but he has seen enough activity to be optimistic that NFC-ready phones will be introduced in the next 12 to 24 months.
Koichi Tagawa, chairman of the NFC Forum, a trade group that provides NFC technical specifications, also was optimistic that the technology soon will move from the test and pilot phase. Tagawa, who also oversees contactless-payment efforts for Sony Corp., said the forum has 11 NFC specifications, all designed to promote interoperability among contactless devices.
However, he acknowledged that early hopes about NFC often have not been fulfilled and that developing the NFC specifications "took longer than intended."
A test under way in Bangalore, India, suggests offering consumers incentives such as discounts is essential to promoting contactless technology, Davlouros said.
Citigroup Inc. kicked off the test in July, and about 5,000 consumers in Bangalore now can make contactless purchases at approximately 400 merchant locations. Participants receive discounts at some retailers and other loyalty incentives.
Davlouros said the test could stretch into the first quarter of 2010 and that he hopes it leads to a broad rollout of the service in India. MasterCard is "not interested in more pilots unless the focus is eventual commercialization," he said.
