From Bangalore Bounce to Skins in America?: Citi Keen To Launch M-Payment

U.S.-based Citigroup recently made a big deal out of the results of its large NFC trial held in Bangalore, India, last year, which showed transactions soared­–by as much as 329% among one subset of users.

But the results from a recently completed study on the six-month trial and Citi’s reaction to it say more about the enthusiasm the bank has for NFC and mobile payment than about how much Bangaloreans bonded with the technology.

In fact, Citi heavily incentivized the 3,100 trial participants to use the phones. If they tapped to pay at least 12 times, the phone would be free. Sure enough, transactions dropped off sharply after the 13th tap, with many users tapping one extra time to make sure they qualified for the Nokia 6212 NFC phone–though the study also showed users disliked what they considered a low-end handset. After the 17th transaction, fewer than 100 users kept tapping.

But let’s be honest, with only 250 merchants equipped with PayPass readers in all of Bangalore, it was probably hard for many users to find a place to pay with their phones. And the dowdy Nokia handset Citi was forced to use for the trial meant many participants kept carrying their own phones and just used the Nokia model for the trial.

The trial did show a significant increase in transactions, compared with the activity of Citibank credit cardholders in Bangalore who didn’t participate. That included increased use of cards by the trial participants–a sort of knock-on effect–or "Bangalore bounce", as I call it–showing NFC mobile phones encouraged less use of cash in general.

Citi hailed the results of the trial earlier this month, and as Satish Menon, Singapore-based executive vice president for Citi Growth Ventures, told me, consumers are “screaming” for banks and other players to “crack” the problem of the lack of infrastructure for mobile payments.

And it doesn’t matter where the trial was held, whether India, where use of cards is uncommon, or in the U.S. or Singapore, where Citi has also held NFC trials to rave reviews.

“The concept still remains that the customer loved it,” he said. “And the degree of adoption seems to say the universal attribute was that the customers found this was a really natural evolution, and they love it. That principal would universally work in any market.”

In other words, Citi is eager to launch mobile payment. And the bank will not wait for more stylish NFC phones to hit the market or for contactless microSD cards to be put through their paces. It is ready to introduce something this spring in the U.S.

As NFC Times reported last month, Citi is planning to issue a payment application in a chip embedded in mobile skins, probably supporting PayPass, perhaps fitting the iPhone, among other handsets. It might be a smaller contactless sticker, instead, but either passive stickers or skins are about the only thing ready for Citi’s planned launch of contactless-mobile payment next month.

In fact, while the skin or sticker chip won’t be able to directly communicate with the mobile phone or network as an NFC phone chip or contactless microSD card could, Citi could send transaction confirmations, alerts and other messages through the mobile network after the payments are processed. And Citi might have ideas for other value-added services connected with the service.

Though Menon declined to discuss any such m-payment launch, he also refused to put down contactless stickers.

“There are several advantages to stickers,” he said. “It’s lower cost. You’re able to satisfy the end-user, even though it doesn’t satisfy the technology purist.”

And Citi, he said, is “looking to be launching a scale solution.”

That is why the bank held one of the largest NFC trials to date involving bank payment in Bangalore. It wanted to see how m-payment would scale.

Now it remains to be seen how well the Bangalore bounce translates into more American consumers tapping their sticker-clad phones to pay at the point-of-sale.

Dan Balaban is editor of NFC Times.


Case Study: Transit Agency in Portugal Combined NFC with BLE for Mobile Ticketing; Faced Challenges

NFC TIMES Exclusive Insight – The agency that runs ticketing for 19 public bus, tram and train operators serving Porto, Portugal’s second largest city, says it has had success–and faced several challenges–with the rollout of its Anda mobile-ticketing app.

OMNY Hits New Usage Milestone as Open-Loop Payments Rollout Continues

NFC TIMES Exclusive Insight – New York’s Metropolitan Transportation Authority, or MTA, says it continues to see steady growth of its open-loop fare payments service, OMNY, announcing 50 million taps by customers using NFC wallets and bank cards to ride the massive New York City Subway and the city’s buses.

In-Depth: Contactless Open-Loop Pilot in Spain First Project from Vendor Partnership

Mar 11 2021

NFC TIMES Exclusive Insight – Bilbobus, which operates bus service for the city of Bilbao, in northern Spain’s Basque region, says it launched its recent trial of con

Moscow Metro Plans Rollout of ‘Face Pay’ Technology for Fare Collection

NFC TIMES Exclusive Insight – The Moscow Metro plans to roll out facial-recognition technology at every station by the end of 2021 to enable customers to pay fares, officials say. The project, while delayed, would be the largest of its kind globally.

Stockholm Transit Agency Launches Open-Loop Fare Payments for Multimodal Rides

NFC TIMES Exclusive Insight – Stockholm Public Transport, or SL, the city-owned company that oversees major public transport in the city, is the latest agency in Europe to launch open-loop fare collection, offering multimodal rides with a tap of a contactless EMV bank card or NFC device.

Case Study: Amsterdam Transit Operator Seeks to Go Nearly 100% Digital for Ticketing to Cut Costs and Enhance Service

NFC TIMES Exclusive Insight – GVB, Amsterdam’s largest public transit operator, says it seeks to replace an aging closed-loop fare card system and go to open-loop and other digital tokens with the planned rollout of its new account-based ticketing system.

Google Announces Plans to Enable Public Transit Ticketing in Maps App along with Rollout of Parking Fare Payments

NFC TIMES Exclusive Insight – Google has announced plans to launch public transit ticketing for more than 80 cities globally in coming weeks from its trip-planning Maps app and also to enable users to buy virtual closed-loop fare cards–starting with the Clipper card in the San Francisco Bay Area–directly from the app. That’s in addition to enabling payments for parking in more than 400 U.S. cities.

UPDATED: U.S. Federal Government Awards Grants to Help Transit Agencies Roll Out Contactless Payments and Mobile Ticketing

Feb 18 2021

NFC TIMES Exclusive Insight – U.S. public transit agencies have been keen to remove cash and paper tickets from their buses and trains and to keep more distance between customers and agency staffers because of the Covid-19 pandemic. Now they are getting a new boost from the U.S. federal government in the form of grant funds to enable them to enhance contactless and mobile payments systems, among other measures.

German Transit Agency Plans to Complete Open-Loop Rollout on Buses and Trains This Quarter, Expand to Other Mobility Later

NFC TIMES Exclusive Insight – German transit agency SWB Bus and Bahn plans to fully roll out its contactless EMV fare payments service BONNsmart to its bus and train lines by the end of the first quarter, after launching a pilot last fall, confirmed a spokesman, who added that plans call for eventually expanding the contactless service to payments for parking and such micromobility modes as e-scooters.

Large Private U.S. Bus Company Latest to Adopt Mobile Ticketing in Covid Era

NFC TIMES Exclusive Insight – Academy Bus, a large private commuter and charter bus company serving the U.S. East Coast, has launched its first mobile-ticketing service with the SilverPass app, enabling commuters to purchase digital tickets with credit cards or employer benefit cards.

LA Transit Authority Introduces Virtual TAP Card on Android, Complementing Earlier Launch with Apple

Feb 2 2021

NFC TIMES Exclusive Insight – The Los Angeles County Metropolitan Transportation Authority, or Metro, has followed through with plans to offer Android NFC phone users a way to pay fares with the agency’s TAP closed-loop fare card.

Penetration Rates for Contactless Payments Saw Strong Growth in 2020, including in U.S., Say Networks

NFC TIMES Exclusive Insight – The CEOs of both Visa and Mastercard in their respective earnings calls yesterday confirmed that contactless payments continued to grow as a share of all face-to-face card payments, with consumer fears of handling cash building on already strong growth trends for the technology.