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Three Taiwanese banks are seeking to enable their customers to tap their mobile phones to make purchases with MasterCard PayPass using microSD cards in a full Android NFC phone from HTC, as well as an iPhone attachment with an embedded chip, as part of separate NFC mobile-payment projects.

The banks, Cathay United Bank, E.Sun Bank and Taishin Bank, plan to issue the PayPass credit applications for the projects, including the first project outside of China with a payment application stored on microSDs that plug in full NFC phones and connect to the NFC chip and antenna via a single-wire protocol connection, NFC Times has learned.

Separately, Cathay United has already launched on the locally produced NFC-enabled iPhone attachment and E.Sun plans to do so soon, enabling customers with the iPhone 4 and 4S to tap to pay where PayPass is accepted. Taishin plans to follow, though has not yet received regulatory approval.

The two mobile-payment projects are coming before possible NFC launches in Taiwan later this year by Taiwan's major mobile operators, which have been discussing forming a joint venture to help coordinate the NFC technology platform. The telcos want to use SIM cards to store the NFC payment applications.

Neither of the planned projects by the three banks use SIM cards as the secure element. The microSD card project is a cause of concern for the telcos, acknowledged one Taiwanese operator. “I think it does threaten the planning of the telcos in the NFC market deployment because it is invoked by the bank, and telcos have no role play in this kind of solution,” he said. 

If MasterCard and the banks distribute microSD cards that work in the full NFC phone model produced by Taiwan-based HTC, it would be the first such project outside of China. It's not clear yet when one or more of the banks plan to launch the project, though it likely would be during the first part of the year. It's also not clear whether any of the banks yet have approval from regulators at the notoriously cautious Financial Supervisory Commission to use the technology for payments. 

In China, the country's dominant payment network, China UnionPay, is using the Android-based HTC NFC model and other Chinese-made phones that are specially equipped to connect the microSD slot with the NFC chip via a single-wire protocol link. UnionPay and at least two banks, including China Construction Bank, plan to roll out the mobile-payment service more widely, using UnionPay's growing base of hundreds of thousands of contactless terminals. The Taiwanese project would likely use the same HTC phone model, known as the Stunning in China.

The so-called SWP-SD phones and cards in China use a proprietary technology. But international standards organizations are drafting specifications to standardize a SWP connection for microSDs, similar to the standard for SIMs. Depending on the location of the SIM and microSD card slots, it might be possible that NFC phones could support both SIMs and microSDs as secure elements using the same SWP connection, sources said. 

In Taiwan, the three banks plan to distribute a combined 3,200 of the iPhone attachments, Char-Shin Miou, head of NFC for Chunghwa Telecom's telecommunication lab, told NFC Times. The device, called Easy NFC, is designed by the telco, Taiwan’s largest. The devices carry an NFC chip and secure element made by NXP Semiconductors.

Both the secure chip in the iPhone attachment and the microSD cards for the HTC NFC phone would run two applications, PayPass and the Mifare-based EasyCard stored-value application. The latter is accepted on thousands of buses and subway gates in Taipei and increasingly in other cities throughout Taiwan. There are more than 25 million EasyCard cards on issue.

EasyCard has expanded to retail and is accepted at more than 12,000 point-of-sale terminals, especially in Taiwan's numerous convenience store outlets. There are also believed to be several thousand PayPass terminals around the island nation.

EasyCard Corp. earlier ordered 1,200 of the iPhone attachments and put them on sale through the popular 7-Eleven convenience store chain starting in October, charging consumers NT$1,580 (US$53.52) apiece. Only 70% of the units sold, however, and Chunghwa and EasyCard told NFC Times the sleeve will be redesigned to broaden consumer appeal.

The launches of the m-payment projects planned by the three PayPass banks using the iPhone attachment and likely the microSDs, also have needed approval from MasterCard Worldwide to run PayPass credit applications. MasterCard has granted approval to run PayPass in the iPhone attachment on a waiver basis, and that will be converted to full certification soon, predicts Chunghwa's Miou. The Easy NFC attachment competes with an NFC-enabled iPhone attachment from Canada-based Wireless Dynamics, iCarte, which Visa has certified.

MasterCard probably isn't close to granting full certification to SWP-SD cards or the phones that run them, but likely would grant a waiver allowing the Taiwanese banks to issue the microSDs running PayPass on the HTC SWP-SD phones.