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Taiwan’s largest mobile operator, Chunghwa Telecom is expected to announce the launch of an NFC wallet pilot Monday, with plans to test two payment applications stored on NFC SIMs and running in a trio of high-end Android phones.

The wallet trial, which the telco plans to announce Monday, would introduce the EasyCard e-purse, used for transit fare collection and small retail purchases, along with a MasterCard PayPass credit application, NFC Times has learned. There will also be an ID application and a membership card from Chunghwa Telecom, itself.

The telco is planning to demonstrate the wallet and to trial it with employees and likely some customers on Samsung’s Galaxy S III, HTC One X and Sony Xperia S, sources told NFC Times.

The NFC pilot with the Android phones and NFC SIMs likely would be a trial run for an NFC commercial launch by Chunghwa Telecom, which has been an early supporter of NFC technology, holding its first trial nearly five years ago.

UPDATE: “Many high-end smartphones available in the market have built-in NFC technology,” said Chunghwa Telecom President Yen-sung Lee at a press conference Monday, announcing the project's launch, according to Taiwan’s Central News Agency. “We expect 2013 to be a boom year for NFC-related services.”

Lee reportedly said that the telco will buy fewer than 1 million NFC-enabled smartphones next year, however, across more than 10 models. Among those will be more HTC models, Jack Tong, president of HTC North Asia reportedly said. END UPDATE.  

Joint Venture Awaits Approval
The telco, however, probably won’t commercially launch NFC until the proposed joint venture it is part of gets approval from the Taiwanese government, observers say.

That proposed venture consists of all five of Taiwan’s mobile operators, including Taiwan Mobile and FarEast Tone, as well as the country’s major contactless-payment scheme, EasyCard Corp.

The venture would set up a common platform to enable the telcos and service providers to roll out NFC. That includes hiring or developing a centralized trusted service manager, or TSM, to deliver and manage applications on SIM cards or other secure elements in NFC phones.

The parties have said they would invest a combined NT$300 million (US$10.2 million) in the venture and have reserved ownership shares for financial institutions, though as of last summer, Taiwanese banks were not interested. But Taiwan-based phone maker HTC has expressed interest in becoming a part owner of the venture.

Still the venture requires approval from regulators, which is expected to include the Fair Trade Commission, which deals with antitrust issues, and the Financial Supervisory Commission, Taiwan’s financial services watchdog.

The latter body has been resistant in the past to allowing the delivery of payment applications over the air to mobile phones. So even though Chunghwa Telecom has its own TSM that has been certified by MasterCard Worldwide to handle PayPass applications, the telco apparently doesn’t have the green light to provision either PayPass or EasyCard over the air to its planned wallet on its SIMs. 

UPDATE: Enabling users to tap to pay at PayPass terminals might also have to wait until next year, according to the Central News Agency, though other largely trial uses of mobile PayPass are in operation. END UPDATE.

The PayPass application is expected to be issued by Cathay United–which is Taiwan’s most active bank in trialing mobile payment. The application and the EasyCard purse will probably be preloaded on the NFC SIMs for the trial. France-based Gemalto is expected to supply the trial SIMs. 

The bank has tried out PayPass on an iPhone sleeve provided by Chunghwa Telecom and also on microSD cards in a specially equipped NFC phone model from HTC.

EasyCard Seeks Role in Rollouts
EasyCard, which is a stored-value application that comes with loading and spending limits, might not have the same restrictions as credit cards, in the eyes of regulators. But it will be preloaded on the SIMs, a source with the telco told NFC Times. 

Chunghwa has worked with EasyCard on most of its NFC projects in the past, including on the telco’s iPhone sleeve, which has been called Easy NFC. The sleeve competes with the iCarte from Canada-based Wireless Dynamics.

EasyCard has issued more than 30 million contactless Mifare-based cards to date, which are used to collect fares on buses and subway trains in Taipei and increasingly other cities in Taiwan. It is also accepted at about 12,000 retail outlets nationwide, including Taiwan’s ubiquitous 7-Eleven stores.

By investing in the joint venture, EasyCard Corp. hopes its mobile application will be included in all of the NFC wallets the Taiwanese telcos roll out.

“They will put us in a preferential position,” I-Cheng Lui, EasyCard’s chairman, told NFC Times in a recent interview. He added that the joint venture is “not a platform to make money, it’s a platform to facilitate the service.”

Chunghwa has held at least five NFC trials or projects with bridge technologies over the past five years, including one or two early pilots using SIM cards in NFC phones.

But it is planning to launch yet another NFC trial, in part, because it wants to try out new SWP-SIM cards as it prepares for future NFC commercial launches, say observers. The trial would also use an Android-based wallet app from Chunghwa Telecom’s Hami Apps program. Chunghwa Telecom would also use its own TSM to download its ID and membership application over the air to its SIMs. The ID application will include employee time and attendance and payment meals in the corporate cafeteria.

That head start that the telco would get with the new NFC trial is said to have irked some of the other Taiwanese operators in the proposed joint venture.

In a separate project, E.Sun Bank is expected to offer a credit application on Chunghwa Telecom’s iPhone sleeve. The application is expected to also support a PayPass application, which would be stored in the embedded chip inside the attachment. Two other Taiwanese banks, Cathay United and Taishin, have already launched limited quantities of the sleeve.

Meanwhile, a report today by local media that one of the applications planned for the trial is 7-Eleven’s own e-purse, called icash, is not true.

President Chain Store Corp., the company that owns the franchise for the convenience store chain in Taiwan, is believed to be planning to expand icash. The company also has franchises for such other large chains in Taiwan, as Starbucks, Mister Donut, retail pharmacy Cosmed and household goods chain Muji and these and other President chains could accept icash.