Norwegian Telco and Bank Latest to Announce Plans to Try NFC Payment
Norway’s largest telco, Telenor, and its biggest bank, DNB, plan to launch their planned NFC-enabled wallet commercially before the end of the year, the telco told NFC Times.
DNB will issue a Visa payWave debit application that will run on Telenor’s NFC SIMs. The Visa application will be the first to launch in the wallet, called Valyou, which is scheduled for a soft launch this summer. Other applications would follow, said Telenor, though it did not release specific plans for launch of the additional services.
As expected, Telenor and DNB announced their NFC payment plans last week at the Mobile World Congress in Barcelona. NFC Times reported on the plans Feb. 21.
“We are focusing on payment first,” Viktoria Erngard, vice president for financial services at Telenor in Norway, told NFC Times in Barcelona, adding: “Everybody uses the card, and chip-and-PIN terminals are everywhere. We are not competing with cash. We are competing with cards.”
There are still few contactless point-of-sale terminals in Oslo or other cities in Norway, however, and Erngard could not say how many would be in place by this summer or later in the year. New POS terminals are shipping with contactless hardware support built-in to merchants, she said. The merchants would need to activate them, though.
In addition, the telco only has one NFC phone model planned so far for the project, the Samsung Galaxy S III, which would be about 18 months old by the time of the commercial launch. It might add other models. But many customers of the telco and bank use the iPhone, which is not NFC-enabled.
NFC, however, appears to have strong support from the telco and bank. The pair has launched two trials, including a Tap2Pay pilot in 2011 in Oslo with 250 users and about a dozen merchants. Surveys came back showing more than an 80% satisfaction rate, noted Erngard.
“We are eager to launch because the feedback we got from 2011 was really positive,” she told NFC Times. “People like using the phone; not having to do the PIN for low-value payment.”
Consumers will be able to make payments with their NFC phones of up to NOK175 (US$30.43) without entering a PIN code.
Other mobile operators launching NFC commercial services to date have started off with payments, including those in the UK, Turkey, Poland and Singapore, but the services have not yet taken off.
“At this stage, Telenor has not added marketing applications, such as rewards and promotions to Valyou,” wrote Eden Zoller, a principal analyst for UK-based consulting and research firm Ovum. “We expect that these applications will play an important role in attracting consumers to mobile-wallet propositions and providing advertising-related revenue opportunities. Advertising is important as mobile payment transactions are typically small, and revenues are shared between players and further eroded by transaction processing fees.”
Erngard, in a video released at the Mobile World Congress, where Telenor was demonstrating NFC applications, said the telco was working on other services, such as loyalty and couponing connected with payment, as well as transit passes and building or room access keys.
The passes and keys, along with payment and other secure applications, would be stored on the telco’s SIM cards. Telenor also has a research project that is testing and developing new applications in the northern city of Tromsø.
Telenor and DNB have a joint venture and Erngard indicated the venture would run the trusted service manager for the project. This TSM would use a platform from France-based Gemalto. Taiwan-based Toro Development will provide the mobile wallet software. The venture in 2008 announced it had formed TSM Nordic, though it’s not clear whether this unit would run the TSM for the mobile-payment project or if another unit would be formed.
Telenor Group is also part of a joint venture in neighboring Sweden with the country’s three other major telcos, which have launched WyWallet for remote and peer-to-peer payments.
In January, the venture launched a trial of passive contactless stickers supporting the venture’s own payment acceptance brand at the physical point of sale. Plans still call for launching the brand, though other telcos in Europe and the U.S. have abandoned such plans.
“We’re trying to be an acceptance brand,” Andreas Ericson, of Telenor Sweden told NFC Times, though acknowledging: “There are challenges with it.”