Pilots Push Contactless Payments

  The move toward contactless payment systems is gaining momentum, as Bank of America Corp., MasterCard Worldwide, Visa International and IBM Corp. all are planning or conducting pilots, rollouts or new products related to the technology.
  In one pilot, nearly 500 BofA employees in Wilmington, Del., began testing Nokia 3220 Near Field Communications-enabled mobile phones with MasterCard PayPass capability. NFC is a contactless payment and information-downloading technology for mobile phones and other electronic devices.
  During the six- to eight-month trial, participants can make payments by tapping their phones at office vending machines, an internal convenience store and the staff cafeteria. The pilot is part of BofA's larger trial of 10,000 contactless fobs at the same locations.
  John Suchanec, a BofA research and development executive, says customers have asked BofA for the technology. However, he cautions that whether consumers actually will embrace the technology may be "different than what they tell you."
  As a result, Suchanec is careful to note that the technology is still in a testing phase.
  MasterCard also began a partnership with Nokia and 7-Eleven Inc. to conduct a six-month consumer trial in Dallas of NFC-enabled Nokia 3220 mobile phones with PayPass capability. In the trial, MasterCard issued 500 phones to existing users of 7-Eleven's Speak Out cell-phone service. The phones can be used to make purchases at any of the 32,000 merchant locations worldwide that accept PayPass.
  In a third development, MasterCard launched the first PayPass program in Latin America in partnership with Banamex, the Mexican unit of Citigroup. The cards have been accepted at McDonald's restaurants throughout Monterrey since Nov. 1.
  "We want to show the world that we continue to lead the way with contactless payments," says Oliver Steeley, MasterCard vice president in the Mobile/Wireless Centre of Excellence.
  Meanwhile, Visa launched a trial of more than 5,000 contactless credit cards in Guatemala, its first such effort in a Latin American country.
  Regardless of the results that emerge from the trials, getting consumers to feel secure while using the technology may take time, says Craig Maurer, an analyst with Soleil Group. Another key is demonstrating to consumers that contactless technology can save them time at the point of sale so that banks and issuers can "capture more of the consumer's wallet," he says.
  As such, Texas Instruments announced the release of a MasterCard PayPass-certified key fob and wristband aimed at making payments easy and convenient. And IBM says it received a patent for an NFC device designed to increase the security of contactless transactions by allowing consumers to selectively activate or deactivate the NFC function.
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