Turkcell to Expand Mobile Wallet to non-NFC Payments after ‘Slow’ NFC Adoption
Turkish mobile operator Turkcell, one of the first telcos to commercially launch NFC, is introducing a new mobile wallet that includes a PayPal-like service enabling consumers to pay for purchases by entering their phone numbers on point-of-sale terminals.
The new Turkcell Wallet will continue to enable users to tap to pay if they have an NFC-enabled phone and SIM, as with the telco’s previous wallet. And the new wallet also will offer separate e-commerce payments with just a phone number, along with person-to-person funds transfers, airtime top-ups and coupons and offers.
But the face-to-face payments service, designed to enable users to make physical-world payments with their phones, is an acknowledgement by Turkcell that the telco’s NFC rollout is not taking off as expected. Still, Turkcell's mobile wallet product manager, Ergi Sener said the telco is not backing off of NFC.
UPDATE: “Because of the slow adaption of NFC payments and still lack of NFC awareness, face-to-face payments will be introduced,” he told NFC Times. “But we will continuously invest in NFC SIM cards and NFC handsets.”
He added earlier that the “advantage of this service is any Turkcell subscriber can benefit from this easily at the physical point of sale.”
Turkcell has not yet introduced the face-to-face payments service as part of the wallet, but plans to do so “very soon,” said Sener. Terminals controlled by Garanti Bank would be converted with a software upgrade. The telco was not promoting this service yet on its Web site as part of the mobile-wallet launch. END UPDATE.
With the system, consumers would enter their phone numbers on the POS terminal, then they would receive a pop-up message on their phone screen. They would choose their credit card from their wallet and enter a PIN code. According to Sener, the user would enter the PIN on the handset keypad. There is apparently an option for subscribers to use a prepaid card instead of a credit card for payment.
With PayPal’s in-store service, users can enter their phone numbers and PINs on the POS terminals, and the purchase is then debited from their PayPal accounts in the cloud. PayPal has signed up home improvement chain Home Depot, with about 2,000 locations, and a few other merchants in the U.S. The new system is PayPal’s first attempt to expand its e-commerce payment service to the physical point of sale. The system also includes the option of plastic cards issued to PayPal account holders.
As with PayPal, a major challenge for Turkcell will be signing up enough merchants to accept the payments triggered by phone number entry in POS terminals. This requires some upgrade to the terminals, as well. Unlike Turkcell, PayPal does not also support NFC in its rollout.
NFC Early Adopter
Turkcell commercially launched NFC in April of 2011 and in July of that year introduced its first branded NFC phone, made by China-based Huawei, called the T20, and known elsewhere as the Huawei U8650NFC. It followed that in January of this year with the ZTE-made T11 NFC model and in July of 2012 with the ZTE-made MaxiPLUS5. All are affordable Android models.
Turkcell also introduced the wallet with the BlackBerry 9900, and sells other NFC phones that don’t support the wallet.
Four Turkish banks are offering NFC applications on the telco’s SIMs, Yapı Kredi, Garanti Bank, Akbank and Denizbank–the latter with a prepaid PayPass application. The operator plans to add two additional banks to the NFC service this year, Sener told NFC Times.
There is also a contactless-mobile toll-collection service available on the Turkcell-branded phones, and plans have called for mass-transit ticketing and loyalty and couponing applications. Turkcell also introduced NFC tags embedded in refrigerator magnets with its last self-branded NFC phone.
Cenk Bayrakdar, Turkcell’s chief new technology business officer, told Mobile Europe that while NFC hadn’t taken off as expected, Turkcell will also invest in larger NFC SIMs. Sener confirmed to NFC Times that the telco would launch a 512-kilobyte SIM card that would support both Visa payWave and MasterCard PayPass. Turkcell has used 256K SIMs for its NFC wallet.
To date, all NFC payment applications on Turkcell’s SIMs have supported only PayPass, and the MaxiPLUS5 is the first Turkcell-branded NFC phone that MasterCard has certified.
Still, it’s clear from the new wallet launch that Turkcell is seeking to expand the reach of its mobile-payment and m-commerce services, which it does not believe it can do only with NFC.
The operator would provide the wallet application to run on Android phones and soon on the iPhone. Subscribers could use the wallet with a SIM-based menu on other phones.
Besides NFC services, Turkcell has also offered a network-based funds transfer service in the past. It will bring both of these together in the new wallet, along with the soon-to-be launched face-to-face payments service and bill payment feature, as well as a new e-commerce service and offers.
The telco said e-commerce payments would be done in a similar way to the planned face-to-face payments service. Users would enter their mobile phone numbers while shopping online at participating Web sites. They get the pop-up screen on their mobile phones, and choose their payment card from the Turkcell Wallet, then enter a PIN. UPDATE: At launch there will be 30 Web merchants equipped to handle the e-commerce payments using subscriber phone numbers. END UPDATE.
Turkcell is working with large Turkish financial institution Garanti Bank to “realize all the payment functions” and plans to expand to other banks. Garanti is serving as acquirer and owns the POS terminals for the launch of face-to-face payments.