London NFC trial shows customers want contactless m-payments

London NFC trial shows customers want contactless m-payments

A pilot scheme that allows Londoners to use their mobile phones to pay for tube journeys and make small value purchases has been hailed as a success, with the majority of participants saying they are happy using the contactless system.

The six month O2 Wallet trial - described as Europe's largest trial of NFC technology on a mobile phone - was run by the phone network in partnership with Transport for London (TfL), handset manufacturer Nokia, card issuer Visa and TranSys, the consortium which currently runs the Oyster card system.

UK consultancy outfit Consult Hyperion also worked on the scheme and provided consulting and development services to O2, including the Blueroom access application.

The consortium gave 500 Londoners NFC-enabled handsets that can be swiped across Oyster card readers in London Underground stations and in buses.

Barclaycard also credited 225 of the 500 phones with £200 worth of non-reloadable funds for making low value contactless payments at participating retailers, including Books Etc, Chop'd, Coffee Republic, EAT, Krispy Kreme, Threshers and YO! Sushi.

The pilot, which was conducted between November 2007 and May 2008, found that nine out of ten participants were happy using NFC technology on a mobile phone and 78% said they would be interested in using contactless services if available.

Having Oyster functionality on a phone was particularly popular, with 89% saying they were interested in taking this up and 87% deciding that availability of the service would be likely to influence their purchase of a new mobile phone.

Around two thirds say using the phone is more convenient than a normal Oyster card and 22% believe the trial actually resulted in them using public transport more.

Over two-thirds also say that they would be interested in having the Barclaycard Visa payWave feature on their mobile in the future with 47% claiming that being able to use their phone to make payments would influence their choice of handset in the future.

Pilot participants cited convenience and ease-of-use as the main benefits. However, some were unhappy that they were not offered the ability to manage their accounts and view Oyster and Barclaycard balances through the application.

Claire Maslen, head, NFC, O2, says: "In theory, any card that you carry in your wallet could be on your mobile in the future. To make this a reality we need to work across industry with a shared vision of what commercial services will look like."

Maslen says O2 is now proposing the establishment of an industry taskforce with the aim of bringing together mobile operators, handset manufacturers and key players from the transport and finance sectors to form the foundations for commercial NFC on mobile services.

A similar pilot launched by a consortium of French banks, telcos and technology vendors last year recently reported customer satisfaction rates of above 90%.

The Payez Mobile pilot - overseen by the French "Secure Electronic Transactions" (TES) cluster in Lower Normandy - was launched in November 2007 to test customer satisfaction and interoperability among systems provided by different suppliers.

Around 1000 customers and 200 sales outlets in the cities of Caen and Strasbourg were recruited to participate in the pilot.

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