Czech Bank ‘Issues’ NFC SIMs for First-Mover Advantage

GE Money Bank in the Czech Republic refers to its launch of NFC services as SIM-centric, but it’s the bank, not partner Telefónica O2, that issues its customers NFC SIM cards.

Well, essentially the bank has served as the issuer. After launching its commercial service in January, customers have gone to its bank branches to sign up for the service, not the operator’s stores, and the bank then has mailed the SIM, personalized with the customer’s account information as part of a preloaded MasterCard PayPass application. The customers, who must be O2 subscribers, then have gone to the O2 shop with the new SIM to have it programmed with their phone numbers.

”It was our decision to drive the end user to the bank rather than the operator to change the SIM card for the NFC market,” said Ondrej Hájek project manager for the service for GE Money, speaking at a conference this spring. “So it really doesn’t matter at this point, if you have the over-the-air personalization and, anyway, we want to have the customer at our branch and not send them to the mobile operator.”

Of course, preloading the application and sending out personalized SIMs by mail was easier for the bank than having its trusted service manager set up its platform to provision the cards over the air, added Hájek. This enabled GE Money, the No. 3 bank by number of branches in the Czech Republic and which considers itself the country’s most innovative bank, to launch the service faster than competitors, he said.

“This was the fastest way to get the fully operational solution in the market,” he said.

The bank and O2, along with MasterCard, launched the service in January. GE Money plans to move to over-the-air downloads and provisioning of its payment applications in phase II of the project, although Hájek in March couldn’t say when that would start.

When it does, the bank would be able to distribute more than one payment card, such as debit and credit, to the same SIM. GE Money has used Giesecke & Devrient as its TSM and so does O2, which he said would help with the launch of the second phase. “We do not want to confuse them (consumers) in terms of payment, he said. “(It) will remain with SIM-centric solution, all payment will remain online and PIN on POS.”

The bank also plans to integrate with other operators, but appears to be planning to drive awareness of NFC with O2, which has been the most active of the operators in the Czech Republic. In response to a question, Hájek said O2 is not charging any fees to GE Money to put its application on its SIMs, and the bank isn’t charging O2 if any users decide to switch operators to O2 just to use NFC.

“We agreed with O2 that this is a first step in order to build the NFC ecosystem and NFC environment in the Czech Republic, so currently we don’t pay anything to O2 and O2 doesn’t pay anything to us. This is a mutual project, where we want to educate the people and we want to provide the NFC solution to them.”

With the second phase, the bank will continue to require customers to enter their PIN in the point-of-sale terminal for all transactions above CZK 500 (US$25.30).

GE Money began issuing passive contactless stickers in addition to launching SIM-based NFC in January. In the first two months following the launch, Hájek noted that the average transaction amount for stickers was only €8.50 (US$11.08), well below that of mobile NFC, at €12.40.

”Mobile NFC average transactions rise to the same value as the case of the contactless cards, which might signal to us the mobile NFC is perceived as the equivalent of contactless cards and a much more robust solution than in the case of the stickers,” Hájek said of the launch results after two months. “So whether the stickers are perceived for the low-value payments, the mobile NFC is really perceived as something that can serve as a standard payment (tool), which is really an important message to us.”

GE Money has also been a leader in the Czech Republic in rolling out contactless cards, with 140,000 issued as of March, representing 15% of its debit card portfolio and 7% of credit cards. There were about 15,000 contactless point-of-sale terminals active in the country, nearly 13% of the installed base of terminals.

Hájek said contactless transactions were accounting for 10% of total card transactions among its customers. Average transaction size with contact transactions, at €31.50, remained much higher than contactless.

HEADLINE NEWS

Vivo Last of Major Chinese Smartphone Makers to Officially Launch NFC Pays Wallet

NFC TIMES Exclusive Insight – Vivo, China’s second largest smartphone maker, made it official this week, launching its NFC-enabled “vivo Pay” wallet, the last of the major Chinese phone OEMs to roll out NFC payments–though their use has been disappointing, at least for payments in stores.

In-Depth: Fit Pay’s Troubles Indicate Difficult Business Case for Provisioning to Wearables

Sep 19 2019

NFC TIMES Exclusive Insight –  Given the poor financial results of U.S.-based Fit Pay, it’s becoming clear that the business case for provisioning of payment cards to wearable devices remains difficult.

Analysis: Chase Pay Latest Bank Wallet to Shut Down; Why Did They Fail?

NFC TIMES Exclusive Insight – Plans disclosed this week by JPMorgan Chase to shut down its Chase Pay app for in-store purchases is yet another nail in the coffin–perhaps the final one–for bank wallets in the U.S. And the situation does not look much brighter for bank-issued wallets abroad.

Miami Latest U.S. City to Introduce Open-Loop Transit Payments

NFC TIMES Exclusive Insight Transit officials in Miami-Dade County, Fla. are the latest in the U.S. to introduce open-loop payments of fares with contactless credit and debit cards and bank card credentials on NFC wallets, launching the service yesterday on the city's relatively small metro network, with plans to expand to buses later.

UK Tram Riders Take to Tapping with NFC phones to Pay for Fares, According to Early Results

NFC TIMES Exclusive – Transport for Greater Manchester, which last month launched open-loop payments on its large Metrolink tram network, said Thursday that contactless credit and debit cards and NFC wallets accounted for a combined 170,000 rides during the first four weeks of the service.

In-Depth: NFC Wallet Use for Open-Loop Transit Grows but Still Makes Up Relatively Small Share of Contactless Payments

NFC TIMES Exclusive – When New York City transit officials announced Tuesday that the 1 millionth ride paid for through their new OMNY open-loop payments service had arrived ahead of schedule, they also proudly noted that 80% of the contactless payments had come from NFC wallets, not physical bank cards. 

PayPay Gets Off to Quick Start as One of Many Digital Payments Services in Cash-Loving Japan

NFC TIMES Exclusive Insight – As Japan continues to fight what to date has been a losing battle against cash, an announcement by the joint venture behind QR code-based payments service PayPay offers a little bit of encouragement. 

Research Firm Projects Use of NFC Mobile Wallets in U.S. to Remain Disappointing This Year

NFC TIMES Exclusive Insight – As Apple Pay approaches the fifth anniversary of its launch in the U.S., there is more research showing that most American consumers simply don’t see the value of tapping to pay with NFC-based payments services. 

In-Depth: Five Years After Transport for London Launched Contactless Across Its Transit Network, UK Open-Loop Rollout Remains Uneven

Aug 15 2019

NFC TIMES Exclusive Insight – Five years ago next month, Transport for London introduced open-loop contactless payments across its transit network, including metro, trams and commuter rail, following an earlier launch on buses. The service now accounts for more than half of all pay-as-you-go journeys and has become a global showcase for the technology.

Apple Again Promises to Push Transit Ticketing as It Seeks Broader Adoption of Apple Pay

NFC TIMES Exclusive Insight – While noting to financial analysts late Tuesday that Apple Pay is now approaching 1 billion transactions per month globally and is in 47 markets, perhaps Apple CEO Tim Cook’s most significant comments about Apple Pay this week was to again emphasize that Apple wants to enable users to routinely tap to pay for bus, subway and other transit rides with their iPhones and Apple Watches. 

Chinese Mega Wallets Continue to Expand QR Code-based Transit Ticketing, while Major Agencies in West Stay with NFC

NFC TIMES Exclusive Insight ­– China’s mega-mobile wallet providers have continued their rollouts of transit payments in China, with Tencent Holdings announcing Tuesday that two years after launching its first QR-code-based WeChat “Ride Code” service in Guangzhou, total users for its transit payments services has reached 100 million.

Sydney Transit Authority Gives Users of Contactless Bank Cards Nearly All Discounts They Get with Closed-Loop Opal Cards

Jul 29 2019

NFC TIMES Exclusive Insight – Transport for New South Wales, Australia, the authority that oversees transit in and around Sydney, has taken a step toward phasing out its closed-loop contactless Opal fare card, today extending nearly all of the discounts it offers on Opal to users of open-loop Visa- Mastercard- and American Express-branded contactless cards.