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Banks could launch retail mobile payment as early as this month or in July as part of France’s precommercial NFC project that officially kicked off in May in the seaside city of Nice, say organizers.

Although it’s unclear exactly when the retail mobile-payment portion of the high-profile project will begin, project organizers say it is imminent–though it likely will not be fully promoted until the fall, after the summer holidays. The payment applications will enable those consumers that have bought the relatively small number of NFC phones available to tap for purchases at roughly a few hundred merchant outlets so far equipped with contactless point-of-sale terminals in and around Nice.

Crédit Mutuel-CIC and BNP Paribas are expected to be the first banks to offer payment, using contactless applications from MasterCard Worldwide and Visa Europe, respectively. The banks are also planning to issue contactless EMV cards. Other banks have indicated they will participate, probably later in the year.

While transit ticketing and a few other lower-profile applications have already launched in Nice, payment was not ready last month for the official launch.

Patrice Hertzog, payment systems manager for Crédit Mutuel, told NFC Times the bank wants to make sure the technology and issuing processes work as planned and are interoperable among vendors before launching its MasterCard PayPass application. Although multiple French banks and vendors participated in NFC “Payez Mobile” trials in the French cities of Caen and Strasbourg starting in 2007, those were pilots, Hertzog noted.

“Now we want to have real conditions,” he told NFC Times. “If we don’t do it (troubleshooting) now, it will be difficult to do it after. The challenge is to provide a commercial product working absolutely without any problems.”

Among the interoperability issues has been making sure Crédit Mutel’s trusted service manager, Gemalto, could set up and manage the bank’s PayPass application on SIM cards produced by other card vendors, such as Oberthur Technologies, he said. The bank also wants to make sure other processes work for getting the payment application activated. The application is expected to be preloaded on SIM cards, though provisioned or personalized and managed over the air.

Customers with NFC phones will activate the payment application in bank branches, according to a statement from Gemalto.

Unlike with BNP Paribas, customers of Crédit Mutuel-CIC will be able to buy the NFC phones in their bank branches, not only in mobile shops. Crédit Mutuel-CIC is majority owner of NRJ Mobile, which is a mobile virtual network operator participating in the Nice project.

Hertzog said Crédit Mutuel has also issued a few thousand contactless EMV cards and plans to add contactless to much of its card portfolio as cards are replaced and new cards are issued. BNP Paribas also plans a contactless card rollout and said last month it would very soon be issuing 5,000 contactless EMV cards to customers in Nice.

BNP Paribas will also make its “KIX” mobile-payment application available. The cards and phone payment service will support the Visa payWave contactless application. For the phone application, customers must enter a “private code” on their handset keypads before completing a purchase. But for purchases below 20 euros (US$24.53), they could choose not to enter the PIN, the bank noted. The procedures are part of NFC mobile-payment specifications the French have adopted.

Such merchants as Intermarché, E.Leclerc, Carrefour and others, such as town-center merchants and the French postal service, La Poste, have been mentioned as likely to accept contactless payments in Nice. Hypermarket and supermarket chain Carrefour has been rolling out its own contactless cards in France, issued by its banking arm.

Four mobile operators, Orange-France, SFR, Bouygues Telecom, as well as NRJ Mobile, are putting something under 4,000 NFC phones on sale to subscribers in Nice initially. The phones will be the NFC version of the popular, though sub-3G, touch-screen phone, the Samsung (S5230) Player One.