Absa trials NFC payments for mobile devices

Banking group Absa (ASA) on Tuesday announced the launch of what it claims is the first live user trial of Near Field Communication (NFC) technology on mobile phones in SA.

The trial would kick off in mid-December and involved 500 of the bank’s own staff members, operating in a live commercial environment.

“Absa is the first institution in SA to bring Near Field Communication (NFC) capabilities with an EMV (Europay, Mastercard and Visa) card payment application to a handset,” said Arrie Rautenbach, head of retail markets at Absa.

“The trial paves the way for consumer market utilisation of the mobile phone as a payment device by using the revolutionary NFC technology. While this trial will facilitate low value payments in retail and transit in early stages, we envision many more exciting new forms of mobile payment in the future,” he said

Absa, in partnership with Mastercard, have embedded their Paypass Tap and Go(tm) payment card on the handsets for the trial. This would enable trial participants to load funds into a prepaid store of value on a secure element on the phone, at point of sale, through Absa Online or at Absa ATMs.

The mobile payment system also contained the National Department of Transport data structure which would, in future, facilitate more advanced payments in transit. The application on the phone would store details of the commuter, the day and time, where they entered and exited the transit system – and use this information to calculate the fares.
Adrian Vermooten, deputy managing executive of Absa Digital Banking, explained that all the payment and NFC services that were available on the handset would be accessed from the mobile phone’s main menu, in addition to information about each service and customer support.

“By simply tapping one’s phone in front of a contactless NFC-enabled pay point, the value of the transaction will instantly be debited from one’s bank account,” Vermooten said.
From the customer’s perspective, the benefits of NFC would include faster transactions, shorter queues, increased levels of security and the ability to electronically track their spending habits.

Vermooten added that the trial would enable participants to pay for goods at coffee shops, canteens, and later, at other service providers located at Absa’s head office in central Johannesburg.

Research In Motion’s BlackBerry models would be the initial handset for mobile payment trials. The BlackBerry device would be equipped with an NFC wireless chip, making it well-suited for mobile payments.

Tuesday’s announcement followed Absa’s pioneering of the “tap-and-go” technology, equipped to make payments by means of tapping cards on a reader. The NFC trial used the same readers to accept payments from smart-phone devices that were enabled with the NFC technology.

“Both technologies are exploring new ways to add convenience and value to payments, typically leveraging off the NFC technology for mobile phones to breathe new life into ‘tap, pay and be on your way’ payment capabilities,” Vermooten said.

“This trial is going to provide key insights which will prove crucial to refining the customer experience as we bring NFC on mobile to market,” he added.

In time to come, consumers will store any type of payment cards in their mobile wallet on their handsets, and either pay online by tapping the phone on a merchant’s reader or on a person-to-person basis,” Vermooten said. “This new technology is paving the way and building acceptance networks for mobile payments in future.”