Google increase security of mobile wallet

Fingerprint sensor will be used as a way to increase the security of Google's NFC payments system. NXP Semiconductors, AuthenTec and DeviceFidelity have announced that Google has tasked them to create an infrastructure to enable the use of the new security measure on their Android smartphones. The system could be ready as early as next year. Larry Ciacca, chief executive of AuthenTec, said: "For the average consumer, knowing that no one can get into their mobile wallet even if something happens to their phone is paramount."

 

The group plan to use fingerprinting with the logic that most consumers will use their fingers to operate the app anyway. Thus, they hope to speed up transaction times.

Make your own NFC iPhone

Too impatient to wait for an NFC-enabled iPhone, one user took matters into their own hands. Vivian Kim simply put a contactless bank card inside that back cover of her iPhone 4. It remains unclear whether or not the iPhone 5 will have contactless payment functionality, despite the technology already being available in Android devices. Another solution for those frustrated at the lack of availabilty of NFC-enabled handsets are the contactless stickers offered by firms such as Citi and Mastercard. Vivian said:

 

"It's a fun and impressive hack that allows you to get just a little bit more out of your iPhone 4."

M6 Toll to go contactless

The UK's M6 Toll road will start accepting contactless payments in a trial beginning in the autumn, according to Midland Expressway who run the toll. The technology will come into full use early in 2012, in time for the London Olympics. Midland Expressway are working with Barclaycard and CreditCall to install the new readers which will allow drivers to simply tap their card as they drive through the toll. It is hoped that the move will make using the toll quicker and easier for drivers.

Hungarian Mobile Wallet Association formed

A group of mobile operators and the loyalty programmer operator SuperShop have joined with Mastercard and OTP Bank to form the Hungarian Mobile Wallet Association. The group, which include Magyar Telekom, Vodafone and Telenor, has come together in order to develop the up and coming technology of mobile payments. Not only will they be looking at the technology but also at the best ways of implementing it in the country. They hope to begin trials this year and to be able to launch the technology early next year. Hungary is the third eastern European country to show an interest in mobile payments, after Poland and the Czech Republic.

RBS goes all out to launch contactless card

Royal Bank of Scotland (RBS) are not the first bank to launch a contactless card but they certainly did it with the most fanfare. The first time one of the cards was used was by the Williams Formula 1 team at a McDonald's drive-thru in Billingsgate, London. The quick pitstop was the ideal showcase for the new card, which RBS claims makes paying twice as fast. For transactions under 10 pounds the card can be used without a PIN or a signature, instead it is simply tapped against a special reader. Iain Clink, managing director of cards and direct finance at RBS said:

 

"Having been the first in Europe to trial contactless cards means we know that everyone wins with this new way to pay. People love the convenience and speed of the card as well as the freedom from worrying about whether they have enough change for everyday things like morning coffee, a newspaper or a sandwich at lunchtime. Retailers like contactless cards too because they make paying faster which means faster moving queues and happier customers."

New player in mobile payments

Mobile payments company Dwolla has hit $1 million in daily transactions after seven months in business. By comparison it took Jack Dorsey's Square 10 months to hit the same figure.

 

Unlike Square and other competitors, Dwolla's system bypasses credit and debit networks and takes payments directly from the user's bank account. Dwolla also combine this with social networking and location-based tools. For instance, users can transfer money to their Facebook and Twitter contacts. The system also means that merchants can accept payments without having to install new equipment.

 

Dwolla still faces challenges though as they have been slow to win over merchants and lack the big name of Dorsey.

PayPal goes offline

Not content with being the platform of choice for online payments,
eBay's PayPal plans to move into offline payments. According to Chief
Executive John Donahoe, the company will be trialling a point-of-sale
system towards the end of this year. If the trial is succesful, they
plan to release the service in up to 20 major US retailers. Donahoe
said:

"We intend to help retailers grow their businesses offline in the same
way we helped merchants grow online."

Contactless comes to Austria

Raiffeisen Bank International (RBI) have launched Austria's first contactless cards in partnership with SIX Card Solutions. SIX specialise in payment technology and have created a card which works with Mastercard's PayPass technology, which gives the benefits of fast and encrypted transactions. The cards use near-field communication technology to process payments with a quick tap on a reader. These transactions are limited to smaller ammounts however, so the cards also contain traditional chip and PIN technology so that customer can make larger purchases and use ATMs.

Isis is joined by payment heavyweights

Although earlier in the year the future of Isis, a joint contactless mobile payments venture by At&T, T-Mobile and Verizon, was uncertain. The announcement this week that American Express, Discover, Visa and Mastercard would all accept payments made via the system, has made it seem a lot more assured. The service is due to go live early next year and the announcement gives it the edge over Google Wallet, currently only compatible with Mastercard.

Hacked customer sues American bank

Thieves stole $465,000 from Village View Escrow in the space of two days and the company are now suing their bank. The California-based company want to be reimbursed the $465,000 as well as to be paid damages for losses due to loan charges and bank fees. They claim that Professional Business Bank did not protect their money properly accordingFederal Financial Institutions Examination Council (FFIEC) and Federal Deposit Insurance Corp (FDIC) guidelines.

 

The case follows one in Michigan where Experi-Metal succesfully claimed $560,000 from Comerica Bank, after the court ruled the bank should have picked up the fraudulent transactions sooner. However, in a case in Maine, Ocean Bank was not held to be responsible for $345,000 lost by one of their business customers in a cyber attack.

US Bank to offer contactless wristband

VITAband, announced this week, is the new idea from US Bank. The lightweight wristband will not only be able to make contactless payments but will also contain emergency medical and contact information. Customers can preload the device's chip with funds by using an online account. Beth Blaisdell, senior vice president for US Bank Payment Services, said:

 

"VITAband is great for sports enthusiasts or people who are on-the-go and don't want the hassle of carrying cash and identification. It provides contactless payment functionality, along with access to emergency contact and medical information, all in one convenient wristband," 

 

The device, which uses MasterCard's PayPass technology, was trialled by US Bank staff earlier in the year. To develop the wristband, US bank worked in conjunction with MasterCard Worldwide, Vita Products, Oberthur Technologies and FIS.

Centra first to adopt NFC in Ireland

With Ireland's first contactless cards due to be issued later this year by Bank of Ireland, convenience store chain Centra have announced that they will install contactless terminals in their stores. That will make them the first Irish retailer to do so. The technology should launch later this year in selected stores, with a full rollout to their 464 stores in 2012. Centra's marketing manager, Tara Glifford, said:

"With the launch of contactless payments, paying for your cup of coffee in the morning or a sandwich for lunch will be easier and faster than ever."

With around one million of the cards being released late this year, other retailers are expected to follow Centra's example.

Transport for London to go contactless

Starting next year, Transport for London (TfL) will make the move to accepting contactless payments. It is curently in the process of installing near-field communication (NFC) readers across its network of buses and underground trains. Brian Dobson, manager of technology and systems for TfL's Future Ticketing Project said:

 

"We are now in a position to say that if people come along with a contactless credit or debit card application on their mobile, we can accept it as an NFC payment in 2012. NFC will work on our new systems from the time that we are able to accept contactless cards."

 

However, the time a contactless payment takes has raised issues. During peak hours on the underground system TfL has strict speed requirements. The current minimum speed is 350 milliseconds but current NFC payments technology takes around 500 milliseconds. Having made this known to card companies, TfL is now looking at cards which may become available between 2012 and 2014 and which will meet the speed requirement. For now, TfL says that contactless transaction speed are acceptable for low-volume periods.

Australian credit card debt surges

In an increase of nearly 45% in five years, credit card debt in Australia reached $49.4 billion. It is believed that many Australians are maxing out their credit cards in a bid to keep up with escalating living costs. The number of credit and charge card accounts will soon reach 15 million with an average debt of $3322 per card. Despite the growing debt, research suggests one in three people still plan to use their cards to buy something they could not otherwise afford in the next financial quarter. 30% of people also expect to have difficulty repaying the money, while half of low-income earners have a credit card.

PayPal launches contactless mobile payment system

PayPal, owned by EBay Inc., has revealed a new system which will allow users to make payments by tapping their phones on a reader. Using near-field communication (NFC) technology, the system will be available on Samsung Nexus S phones. Compatibility will widen as more NFC-enabled handsets are released. Laura Chambers, PayPal Mobile's senior director, said:

 

"What we're doing is testing out NFC. We're getting it into the markets, we're getting it into the hands of consumers and we'll see how it goes."

 

 

Mobile payments will go mainstream

A new survey by KPMG has revealed that major banks and business believe mobile payments will become mainstream in the next few years. This belief is leading more than 80% of them to look at incorporating m-commerce into their business models, according to the KPMG Monetising Mobile survey.

 

However, the report also highlighted than some banks and business are still sceptical about the merging technology, feeling unsure that customers are ready for it. KPMG said:

"For banks that are still standing on the sidelines of the race for mobile payments solutions this is a critical juncture – continued delay may risk the loss of market share."

Europe to create NFC logo

Mobile operators in Europe have agreed to create a single, shared logo that will allow users to instantly spot where they can use their contactless cards and phones to make purchases. Telefonica 02, Vodafone, Deutsche Telecom, Telecom Italia and France Telecom Orange are to create the new logo, which they hope will drive usage of the technology up.

 

The NFC Forum has already created the 'n-mark' for this purpose but the operators feel that this doesn't have a strong enough visual presence. Nick Wilikin from O2 said:

"This is something we all think is necessary. It's very much in the discussion stage at the moment, but we all agree it's something we should have."

McDonald's introduces contactless in Canada

As of last week, contactless payments were launched in 1,400 McDonald's restaurants across Canada. The new terminals will allow fast-food diners to pay for their meal with either a contactless enabled smartphone of credit card and work with both Visa PayWave and Mastercard PayPass technology. David E. Orzel, head of market development for MasterCard Canada, said:

"McDonald's prides itself on efficiency and we expect that McDonald's customers will appreciate how this technology will improve their overall experience."

Currently only available for counter service, the technology will be added to drive throughs later in the year.

Contactless comes to Slovakia

Gemalto will supply NFC-enabled stickers for mobile payments which will be issued by UniCredit Slovakia. The stickers allows ordinary mobile phones to be used for tap and go payments up to 20 euros. There are around 3,000 locations in Slovakia which currently have contactless readers. Gemalto has said that the stickers are ready for an "immediate" launch.

'One-click' too obvious to patent

The European Patent Office (EPO) has refused to grant a patent for Amazon's 'One-click' payment system. The system allows users to make purchases with the click of a single button on the webpage and has already been granted a patent in the US. However, the EPO ruled that the system was reliaon 'prior art', i.e. existing inventions.

 

To qualify for a patent, inventions must be new, not too obvious and useful to the industry. The Amazon system allows registered users who have previously entered their payment details to make with the click of a single button. The EPO said:

"The Board does not consider that the idea of reducing the number of steps necessary to make an order would contribute to inventive step."

Bank of Ireland to offer contactless cards

Bank of Ireland have launched contactless Visa debit cards for their customers, allowing them to pay for purchases of less than 15 euros in under a second. Utilising near-field communications (NFC) the cards are held over a special reader to process the transaction.

 

If too many payments are attempted in this way though, or if any exceed 15 euros, a PIN will be required. The cards also have exactly the same consumer protection as their predecessors. Quentin Teggin, head of consumer segments at the Bank of Ireland, said:

"This new technology has been firmly embraced in Europe with over 20m cards in circulation and we are delighted to be the first in Ireland to issue Visa debit cards with contactless payment capability."

'Too many banks' according to EU watchdog

A fragmented market and the lack of an integrated payment system mean that European banks cannot compete effectively with their American and Chinese counterparts, according to Joaquin Almunia, the EU's competition commisioner. In an interview with the Financial Times, he said:

 

"I would not have any problem with observing a process of reducing the number of players at the European Union level. We have a lot -- too many."

Apple latest hacking target

After Sony, Citigroup and Google, Apple have become the latest big company to be targeted by hackers. A group called Antisec posted a tweet on Sunday in which they claimed to have stolen sensitive information from the technology giant.

Antisec said they had retrieved a number of administrator usernames and passwords by exploiting a weakness in software used by Cupertino, but also said: "But don´t worry, we are busy elsewhere."

Although it seems payment information is safe, this is another worrying incident in what is becoming a hacking trend.

Apple declined to comment.

PayPal expects $3 billion mobile payments this year

PayPal have increased their mobile payments forecast for the third time this year, to $3 billion. This is double the company's intitial forecast of just $1.5 billion. The reason for the increase is a large and unexpected rise in the usage of PayPal's mobile payment service. Laura Chambers, the company's Mobile Senior Director, said in a blog post:

 

"Mobile payments are growing at a rate we never could have imagined when we started processing them back in 2006 – in fact, this is the third time we've had to update our mobile 2011 projections."

Contactless trial a failure

ANZ Bank has announced that it will not be pursuing contactless paymentshe form trialled earlier this year. In the trial the bank worked with Visa's Paywave system to issue NFC-enabled MicroSD cards to members of its staff. However, the use of the MicroSD cards was not a satisfactory way to implement the technology.

 

The bank is now looking at other ways to bring contactless payments to its customers but its next move is unclear. Some feel ANZ will look at devices with built-in capability such as the Nokia N9 or Samsung Nexus S but all the bank had to say was that they will "continue to look for ways to support contactless payments in the market". Also adding:

 

"Overall, we found the trial extremely useful as it confirmed that customers like to use contactless for low-value transactions under $100. Contactless is an extremely exciting piece of innovative technology and we're looking forward to seeing how we can implement it for our customers in the future."

Citibank launches contactless cards in Czech Republic

Citibank have launched the first contactless Shell Mastercard credit cards in the Czech Republic. Holders of the new cards will be able to make contactless payments at all Shell garages in the country along with any other retail outlet which has adopted the technology.

George Denisenko, Citibank's head of consumer lending in the country, said that the new cards, which use Mastercard's PayPass technology, will make paying for things quicker and easier for the bank's customers.

Post Office becomes largest retailer to adopt contactless

The 12,000 branches of the UK's Post Office will be ready to accept contactless payments as early as October 2012. This will make it the largest retailer yet to do so. 30,000 terminals will be installed to allow customers to 'tap and go'. Contactless transactions are currently limited to £15 but 60% of Post Office transactions fall within this limit.

Barclaycard and Egg to integrate

After acquiring Egg this April, Barclaycard have announced plans to integrate the 1.15 million Egg credit card accounts into their portfolio. From November, servicing of Egg accounts will move from Egg's Derby centre to existing Barclaycard locations.

This means possible redundancy for Egg's 659 employees who have agreed to transfer to Barclaycard. If they happen, redundancies would occur in stages over the remainder of the year. Paula Gowland, Operations Director at Barclaycard, said:

“Our proposal to cease operations in Derby was a tough decision to make. People were informed as soon as the decision was made to give them as much time as possible to consider their options and take advantage of the extensive support and assistance we’ll be offering to every individual throughout the transition.

iPhone owners enthusiastic about mobile wallets

Although Google has led the charge, it is users of the rival iPhone that are most looking forward to the technology according to a recent study. The survey, by Retrevo, also showed that consumers wanted Apple to provide the service. On the whole though, the figures were not overwhelming and suggest traditional wallets will still be around for a while.

 

Alternative payments to double in 3 years

By 2015 so-called 'alternative payments' will double from the $62 billion they are currently worth, according to a new report. Alternative payments are defined as those which are entirely electronic and conducted mostly by mobile phone or the internet.

They have already doubled since 2006 and were up 25% in 2010 on the previous year. The report, by Packaged Facts, predicts this will continue with Packaged Facts' research director, David Sprinkle, saying:

"PayPal alone announced $750 million in total mobile payment volume worldwide in 2010 and expects to reach $2 billion for 2011. Though PayPal may be the only player recording that level of mobile payments, several major initiatives either rumored or announced indicate that interest in mobile payments is hitting critical mass. The old school payments paradigm will start losing more and more of the playing field."

Major players, such as Google and Mastercard, are making significant moves into the arena and a number of countries are investing in preparing for new technology such as contactless payments.

Alternative to NFC for contactless payments?

Until recently near-field communication (NFC) technology has been synonymous with the recent rise of contactless payments. But now a California-based startup has come up with an alternative technology.

The company, called Naratte, claims to have created an app which will allow any phone to process contactless payments regardless of NFC capability. 'Zoosh' generates an inaudible, extremely high pitched noise which creates a secure conncetion to either another Zoosh-enabled phone or a special reader.

The technology has the same functionality as NFC but can be used by a much wider range of phone as all that is needed is a speaker and a microphone. Older phones which don't support apps will be able to use the service through text messages with embedded audio files.

As ever, the problem will be take-up. Naratte must get its Zoosh terminals into stores or consumers won't use the technology.

Orange pushes mobile payments in Poland

Having already focussed on the UK, Spain and France, Orange is now looking to roll out its contactless mobile payment scheme in Poland. In order to do so, the company's Polish arm PTK Centertel has formed a new partnership with Gemalto. Gemalto will provide PTK with NFC-enabled SIM cards and applications which will help their customers take advantage of the 35,000 contactless terminals already in the country.

Krzysztof Sieczkowski, director, product and content development, PTK Centertel, said:

"We need a complete solution to speed up our time-to-market, and leverage the strong contactless payment network already existing in Poland to make our consumer the first to benefit from the NFC experience."

Sega latest hacking target

The seemingly endless string on recent hackings has continued with Sega. 1.3 million customers of the company have had their details stolen, including login IDs and passwords but no credit card details. However, people affected should still be watchful of their bank accounts.

Cheques will be staying

After failing to find a suitable paper-based alternative, the Payments Council has put plans to phase out cheques on hold. Cheques will still be an accepted form of payment until 2016, which will be welcome news to the charities and elderly people who are the main users of cheques.

Richard North, head of the Payments Council, said:

"There is no question of there being a closure of the cheque clearing system without there being alternatives in place which are widely in use."

Pizza Express diners can now pay by mobile

In a rush after dinner? Well, if you're eating in Pizza Express you can now use your phone to pay and be on your way. Created in partnership with PayPal, the new iPhone app will provide users with a unique code to use for payments. Both the customer and the restaurant will receieve electronic notifications to confirm the payment, ensuring there are no 'dine and dash' accusations. The chain will also be rolling out free wifi in all their branches to make the process even easier.

Mark Angela, chief executive of Pizza Express, said:

"We knew there was no point just launching an app for the sake of it, so we waited until we had a system that could genuinely improve our customers' experience of eating out at PizzaExpress."

Vodafone and O2 collaborate on NFC

Vodafone, O2 owners Telefonica UK and Everything, Everywhere are joining forces with the aim of creating a standardised platform for mobile payments. The group also plans to liaise with banks, advertisers and retailers to make the system as easy as possible to implement.

There are also plans to create offers, coupons and tickets which can be used via smartphone.

Starbucks app to include Android phones

The global coffee chain Starbucks have extended their mobile payments application to work with Android smartphones. In addition, Chuck Davidson, Starbucks' card innovation manager, said that the company would focus on barcode readers on mobiles rather than NFC technology. So, the app allows store readers to scan barcodes on smartphone screens. Davidson added:

"Having NFC readers is not the issue; it's NFC in the phones, which we believe is two-and-a-half to three years out."

The company saw 3 million mobile transactions processed in the first nine weeks following the scheme's launch.

Music festival introduces contactless wristbands for payments

Music lovers attending the Isle of Wight Festival were invited to trial Mastercard pre-paid contactless wristbands during their stay. And 100% said they would use it again.

The system obviates the need to carry a large amount of cash at festivals and participants also found them quicker and easier to use than traditional debit or credit cards. The wristbands were loaded with £30 and distributed to people in the festival's VIP section. Hany Fam, President of Mastercard UK and Ireland, said:

“During this pilot we have made some significant steps towards achieving this [cashless] goal. We look forward to extending the PayPass prepaid wristbands to provide access as well as payments at more festivals and events across the UK.”

South Korea to invest in m-commerce

With plans to install near-field communication (NFC) terminals in 300,000 merchants and new requirements for mobile phones to be set up for contactless payments, South Korea has become the latest country to jump on the contactless/mobile bandwagon. The country's communications commission announced the move on Monday, and the commission's head said:

"Mobile payment technology has been available since early 2000 but it failed to take off for various reasons ... but today's agreement is a small step toward mutual growth going forward."

The reasons he mentioned include the relatively small range of NFC-enabled handsets and the lack of standardised checkout systems but the authorities believe the new measure will boost sales of NFC handsets to over 5 million units this year.

NZ trial contactless mobile payments

Mastercard and NZ are working together to pilot the first mobile payments system to use near-field communication (NFC) technology in New Zealand.

The pilot will consist of ANZ employees, who will be issued with either an NFC-enabled memory card or a sticker (similar to those used by Bling Nation) to use in conjunction with their phones. The stickers can be used with any phone model although the MicroSD memory cards are only compatible with BlackBerry handsets. Then, using Mastercard's PayPass technology, participants will be able to make purchases of up to $80 simply by tapping their phones on NFC terminals.

Currently there are around 300,000 locations worldwide using the PayPass technology but ANZ will be working to install that in major chains across New Zealand. The technology should receive a wider launch later this year.

Did Citigroup drag their heels?

It has emerged that Citgroup waited up to three weeks before informing customers of the recent hacking in which e-mail addresses and account numbers were stolen. The reason given for this is that the company was using the time to conduct an internal investigation and produce the necessary replacement cards.

The investigation took between 10 and 12 days and in some cases Citi took action to protect the accounts they believed to most vulnerable. This had led some to accuse Citi of dragging their heels on the issue. The company has informed the authorities and will send replacement cards to the majority of those affected. The hacking also coincides with hearings on data security by the US Senate banking committe.

Virtual payment system launches in China

China UnionPay has launched an online and mobile payment system, the first of its kind in the country. It can be used for transactions on the internet both domestic and international. The system also supports the Apple iOS, Android and Windows phone operating systems.

Using the system, customers log in and use their card numbers to pay for things. China UnionPay also has agreements in place for more than 60 other banks in the country to support the system. Feng Lin, an e-commerce expert with the China eBusiness Research Centre, said:

"It will take time to see whether China UnionPay's online payment is attractive to customers. And it also depends on how much the merchants will pay if they want to cooperate with China UnionPay."

Citigroup hacked

An estimated 200,000 customers have had their details stolen in the latest in the recent series of high profile hackings. Other targets have included Sony's Playstation Network, Google and defense contractor Lockheed Martin.

Citigroup have said that during routine monitoring they discovered that around 1% of its 21 million credit customers had had their details stolen, including account numbers and e-mail addresses. They insisted though that hackers had not been able to access birthdates, social security numbers or card security codes. This means that the hackers should not be able to use the information for identity theft, the usual aim of this sort of data theft.

However, the details the thieves need could be obtained using the stolen e-mail addresses so the bank and their customers must remain vigilant.

Bling Nation pauses for thought

The American mobile payments company, Bling Nation, has admitted that its business model has failed to lure in merchants. They are now rethinking their approach.

The company provide near-field communication (NFC) stickers which are put on mobile phones and then used to make contactless payments. In the early days things seemed to be going well, $30 million funding was raised and several smaller banks signed up, glad to have an alternative to the payment giants.

Late last year Bling introduced FanConnect and that was where things began to go wrong. FanConnect is a social-media based reward scheme which was compulsory for their bank and merchant partners. Merchants began to ditch the service rather than adopt FanConnect.

They have now accepted they need to change and have shut down in order to rethink. Such a pause may prove costly, however, with mobile payments gaining momentum all the time.

Ericsson launches mobile wallet in Europe

Hot on the heels of Visa and Google, Ericsson have launched a mobile money network in seven European countries. Users in the UK, Germany, France, Poland, Sweden, Spain and Italy are being offered the chance to sign up to the system which allows them to send and receive money using their mobile phone handsets.

Ericsson created a Money Services division specially for the creation of this scheme, which uses the Ericsson Money Interconnect network and is compatible with other mobile wallet systems. The company plans to rollour the scheme across the rest of Europe.

Semir Mahjoub, president of Ericsson Money Services, said: "Simply having a friend's phone number, irrespective of where he or she is in the world, will open up access to financial services and mobile money in a new way. Individuals around the world can benefit from globally connected money services in their everyday lives by making money transfer more like mobile communication."

Visa makes mobile move

The $100m acquisition of cellphone company Fundamo by Visa with allow them to "accelerate the execution" their global mobile payments strategy. Visa bought the Cape Town-based company in a cash deal in order to get at their estimated 5 million reigistered users across Africa, Asia and the Middle East as well as the potential to rach over 180 million more.

Bill Gajda, Visa's head of global mobile products, said that the aim is for customers to be able to process financial transactions "wherever and whenever they choose, using a card, a computer or a mobile device".

Paper-based alternative to cheques must be available

After the House of Lords debated phasing out cheques by 2018, they have told the Payments Council that any alternatives must include a paper-based system. Lord Sassoon, treasury secretary, said:

"Back in December 2009, the government welcomed the commitment made by the Payments Council, which was clear that if it took a decision to end the present system of cheque clearing in October 2018, it would do so only if there is an available, acceptable and widely adopted alternative system. The government have been clear that that must include a paper-based system."

But some peers wondered how a new paper system would differ significantly from cheques. Sassoon cited the decline in the use of cheques and said that a rewrite of the current system would be "very expensive", while insisting that a new sysytem must be "acceptable to small businesses, charities and other individuals".

France to launch NFC payments in 2012

France is all set to launch contactless payments in the Spring of next year. The French government has promised twenty million Euros to help promote the technology's adoption and four mobile networks (Orange, SFR, Bouygues Telecom and NRJ Mobile) and four banks (BNP Paribas, Credit Mutuel, CIC and Credit Agricole) have all announced plans to roll out the technology nationwide.

The government has long been a financial supporter of contactless payments and the latest money has been made available to French cities to fund innovative ways in which NFC benefit citizens in their daily lives. the Association Européenne Payez Mobile (AEPM) has also worked to ensure interoperability and security for the emerging technology.

Could Nigeria become a cashless country?

The Central Bank of Nigeria (CBN) has received support from the World Bank to introduce a nationwide electronic payment system. The aims of such a scheme would be to combat widespread corruption in the country and save 10 million Naira by not having to print banknotes.

The World Bank's backing came at a book launch for Achieving Nigeria’s Financial System Strategy 2020: Making Finance Work for Nigeria. The World Bank argued that the introduction of such a scheme would not only strengthen the economy but also encourage growth and thereby lead to new jobs.

The CBN recently announced its intention to create a cashless economy beginning in June 2012 but the general public was less than thrilled with the news. They plan to begin by limiting the amount of cash individuals and businesses are allowed to draw and imposing charges if these limits are exceeded.

20 million contactless cards in the UK by the end of the year?

Visa has predicted that there will be 20 million contactless cards in the UK by the end of this year. At the end of March there were already 13 million Visa PayWave cards in circulation, with more and more people are expected to start using them as NFC terminals are installed by major businesses, such as McDonald's and Starbucks.

More banks are also starting to use the technology. Royal Bank of Scotland, Lloyds and Bank of America have all joined Barclays in issuing contactless cards. Transport for London's contactless Oyster system will also allow people to use their Visa PayWave cards by 2012.

2012 is set to be a big year for contactless payment, with Visa and Lloyds raising the technology's profile ahead of the London Olympics, in which they are official partners.

BP/Aral to launch contactless payments in UK, Germany and Switzerland

Consumers will soon be able to use their contactless cards in more than 4,000 petrol stations in the UK, Switzerland and Germany. Mastercard PayPass terminals are to be installed in BP and Aral sites over the next two years.

With the upgrades in place, users will be able to buy petrol, snacks and other items by simply tapping their contactless card on the special readers. However, these transactions are currently limited to £15 in the UK, 25 Euros in Germany and 40 Francs in Switzerland. The same cards can be used for larger payments but a signature or PIN code will be required.

Contactless pickpocketing?

There have been concerns over whether contactless technology means fraudsters will be able to steal data from the cards in your pocket. But is this a serious risk?

Experts say not. It is possible to use a card reader to 'sniff' people's data but there are measures in palce which limit what they can do with it after that. New encryption measures are also developing along with the technology itself.

The issue came to light at the end of last year when a man in Tennessee was able to use a card reader and laptop to steal card information from passers-by. He was able to retrieve card numbers, expiry dates and some names. But Jack Jania, secure transactions general manager for North America for digital security provider Gemalto said:

“It’s one thing to obtain the information. It’s another to be able to use it.”

Most contactless cards use a dynamic verification system for transactions in addition to encryption which mean the data retrieved would not be sufficient to allow the thief to start spending.

O2 makes first move into payments

Hot on the heels of Orange, O2 are branching out into payments. The mobile phone network provider has launched a new Facebook app which allows people to top up their phone through the social networking site. Pre-paid customers will be able to store credit card details on the secure app which thye can then use for top-ups.

When a transaction has been completed confirmation will be sent to the user in the form of a text message. With the huge popularity of Facebook, O2 believe their customers will appreciate not having to log out of the site in order to process transactions.

O2's head of social, Alex Permain, said:

"We decided to launch with a payment mechanism that people are already used to and confident with [in terms of security]. We'll take this a lot further if it proves successful."

The app seems to be an early step towards the mobile wallet scheme which O2 announced they were developing earlier this year.

JPMorgan Chase creates app for small businesses

The new Jot mobile application, from JPMorgan Chase, aims to help small business customers control their finances. The bank hopes the app, available on iPhone and Android, will attract new customers to their Ink from Chase business division, as well as benefiting existing ones.

The app's release comes at a fortuitous time as a survey released this morning by the Small Business and Entrepeneurship Council showed that 78% of small businesses believe that smartphones can save them time. Although there are many similar apps available, JPMorgan Chase believes this one beats them all. Jot allows business owners to track employee expenses in real time, and the employees themselves can categorise expenditure while it is still fresh in their minds.

Richard Quigley, president of Ink from Chase, said:

“Jot was designed with small business owners’ immediate financial needs top of mind. Jot will enhance the finance-savvy business practices of small business owners, allowing for additional time and an improved focus on the passion and sense of accomplishment they have for their businesses.”

Ingenico installs NFC in black cabs

You can now pay your taxi fare using your contactless card, thanks to Ingenico who are making the technology available to all of London's 25,000 black cabs. The scheme, launched this week, is part of a Visa Europe led initiative to widen card acceptance in the capital's taxis.

The system is based on Ingenico's iCT250 contactless device, which also accepts traditional cards, and will feature additional services such as mobile phone top-ups. The company hopes this will lead to increased revenue for taxi drivers as well as an improved experience for customers.

Viruses not a serious threat to contactless m-commerce

According the Mobile Data Association (MDA), although there are potential virus risks in contactless mobile payments, there are sufficient controls in place to combat these.

Mike Hawkes, chairman of the (MDA), said:

"It's somewhat more difficult to put out a virus that will work across all devices. If you consider how many various handsets and types of software there are, it's actually very difficult to put something into a handset that can propagate onto other devices.

The conventional viral models are actually very difficult to put onto mobile networks. The networks themselves are also very proactive in this area; the likes of O2 and Orange are extremely good at preventing viruses from coming down to handsets over the air."

Australian hospital goes cashless

Macquarie University Hospital has set up a cashless payment system for its patients. They will use pre-paid contactless cards to pay for food, phone calls, etc around the hospital. The cards will also work with bedside terminals which track patient care.

Macquarie opened last year as a 'paperless e-hospital' and this initiative is all part of that. The hospital also digitised all its records, which doctors can now access securely using contactless cards.

The hospital's CEO, Mike Rawston, joked that not everything is so hi-tech though. They installed their 9-tonne MRI machine by dragging it across the floor with "15 guys using 3 ropes".

Google wallet security has weak link

Google have worked hard on the security of their new mobile wallet but concerns have still cropped up. According to the some, the 'authorised' Android app at the end of the chain is the weak link. Most of the process of paying with the mobile wallet is covered by the same security as more traditional payment systems and the phone itself has a tamper-proff encrypted chip specifically for storing card data.

The Android app itself is still protected by a PIN code but Oliver Lavery, Director of Security Research and Development for nCircle, said:

"Many people don't set PINs on their phone, in spite of how easily this sort of device can be lost or stolen."

Experts have also identified the risks inherent in the 'open' nature of the Android app system. The potential is there for a fraudster to create their own app which can be used to trick the smartphone into giving up users' details.

Payments council launches industry-wide m-commerce project

The Payments Council has launched a new project which will work with UK banks and building societies on delivering mobile payments. Unlike many recent initiatives this project will focus on moving money between bank accounts, rather than on contactless payments. Payments Council acting CEO Gary Hocking said:

"It is still early days in this project but we want to explore how a mobile phone can help customers make a payment from one account to another. Of course security is a priority for us, and the work being done to bring this technology to life will focus on this. This industry-wide project will help deliver a way of sending money that is safe and easy for consumers."

Their initial research suggests that around a quarter of people would be likely to use a mobile payments service.

Google launches mobile wallet, eBay sues

On Thursday Google launched a new Android app which would turn the phone into a mobile wallet. The app uses virtual card which allow handsets to be used for contactless payments. Citibank is the initial partner but the service will expand, including reward schemes, gift cards, boarding passes and possibly even keys as well as credit cards.

Within hours of the launch, Google were being sued by auction giant eBay, who alleged that their trade secrets had been stolen and used in building the technology. The crux of the complaint is that Google Wallet project lead Osama Bedier was poached away from PayPal in the middle of negotiating a deal between Android and eBay-owned PayPal.

Google is yet to respond to the accusations but if the case goes to court and Google loses, it could seriously damage the fledgling service,

Meanwhile, Apple will be watching with interest. Reports suggest they are preparing their own foray into mobile payments. Although reports differ on whether NFC technology will be included in the next generation of their iPhone.

'Mobile money' is a new way to provide aid

Earlier this year, USAID and Mercy Corps started using mobile phones as a way to give Haiti aid for emergency food supplies. The Kenbe-La scheme works with phone company Voila and Unibank to provide beneficiaries with $50 a month in 'e-cash'. Using low-cost phones provided by Voila, those using the scheme get their money by text message which they can then use at over 50 shops to buy rice, beans, oil and maize.

The scheme isn't completely mobile, though. The participating stores receive the e-cash from shoppers using a special till and pin-code and then obtain hard cash from Unibank.

Dorsey's Square now processing $3m a day

Jack Dorsey's Square is now processing $3m in payments every day. Square offers a device which allows anyone with a smartphone to process card payments and has proved a big hit since it launched. New functionality has also been added by Square this week.

On Monday Dorsey revealed Card Case, a mobile wallet. Card Case will mean consumers no longer need a credit card for small purchases. Instead they will be able to set up a digital tab under their name, similar to the system used on the iTunes store.

Square is one of a growing number of companies looking to turn smart phones into digital wallets. According to Dorsey, cash and cards are becoming "relics of an expensive, complicated and impersonal commercial transaction system."

Starbucks set to introduce contactless payment

Starbucks have become the latest big company to show an interest in contactless payments. In a partnership with Barclaycard and Visa Europe, Starbucks are to trial contactless payments in their UK stores. The trial for contactless credit/debit cards starts next Spring and follows the introduction of smartphone-based payments in their US stores earlier this year. If the trial is successful, the scheme will be rolled out across the company's UK and Ireland stores.

Pete Blower, Starbucks EMEA Technology Services Manager, says: "At Starbucks we're as committed to customer service as we are to great coffee. We're seeing more and more people use cards for payment and contactless will allow us to serve our customers more quickly and with greater ease."

Young consumers are looking forward to NFC mobile payments

Nearly two-thirds of 18-34 year olds are happy using their mobile phone to pay for things. A study by Kelton Research for Mastercard also found that 65% of young Americans woudl rather be without their waller than their phone.

Conversely 63% of respondents over 35 said they would not feel comfortable using their mobile phones to make purchases. Many people also felt that issues of privacy and security need to be addressed before they would trust the technology.

"Consumers are already living a mobile lifestyle so using their phones to make payments on a daily basis is a natural next step," said Mung Ki Woo, group executive, mobile at MasterCard Worldwide.

Contactless payments could lead to new business opportunities

Businesses shoudl see new opportunities opening up as contactless payments become more prevalent. The Mobile Data association believes the new technology will allow businesses to capitalise of impulse buying and create marketing which is better targeted. Mike Hawkes, the association's chairman, said:

'I think all of the operators are savvy enough to [know] that if they push too much content to people in a way that's inappropriate they will lose customers. It's more likely to be pushing stuff that's likely to be of interest rather than just random stuff.'

He also believes that contactless payments will become a lot more popular as the public becomes more aware of them through events such as next year's Olympic Games.

Orange and Barclaycard launch UK's first contactless mobile payment service

Quick Tap, from Orange and Barclaycard, allows Orange mobile users to use their phone to pay for purchases up to £15.

This is first system of its kind in the UK, although there has been much talk of late about contactless and mobile payments. Contactless readers are currently in 50,000 shops across the country, including branches of Pret-a-Manger, McDonald's and Subway.

Customers who want to use the service will need to have a Quick Tap enabled handset. The scheme has launched with a special version of the Samsung Tocco Lite but more Quick Tap-ready handsets are expected to follow soon.  Pippa Dunn, Orange's vice president, said:

“It’s going to start a revolution in the way we pay for things on the high street."

Are UK users ready for contactless payments?

Just over 20% of them are according to a survey by Axciom. That equates to 6.8m people and, with the advent of NFC-enabled phones, will provide for thought for companies wondering whether to invest in NFC capability.

McDonald's are already installing NFC terminals in all their UK restaurants but it remains to be seen if other big businesses will adopt the technology. Axciom's survey also showed that users will be more willing to NFC payments if it also means they can get rewards in real time. Gaurang Vartikar, head of mobile for Axciom Europe, said:

"Brands now quickly need to understand who these supporters of NFC are, what they spend their money on and what they will use the new services for in order to send them targeted, relevant offers."

Visa and Lloyds promote contactless payments for 2012 Olympics

Visa and Lloyds are working with Samsung, whose NFC ready smartphone will be distributed to athletes at the 2012 Olympics, to promote contactless payments. The Samsung phones could be on general sale as soon as September and contactless terminals are expected to be in 60,000 locations in time for the games. Visa Europe's head of innovation, Sandra Alzetta, said:

"The Olympic and Paralympic Games offers an unrivalled opportunity to demonstrate the power of mobile payments to a worldwide audience."

Lloyds TSB are launching an internal pilot for contactless payment this month with a possible commercial launch by the end of this year, ahead of working as issuance partners on the Olympics scheme.

Survey: PayPal most trusted for m-commerce

Consumers in nine major markets are most likely to trust eBay-owned PayPal with their personal data, according to a survey conducted by GfK. The news could provide a big boost for PayPal as things speed up for mobile payments.

Visa, Mastercard, Apple, Nokia and Samsung followed up PayPal in the findings. Mobile operators who have been hoping to break into m-commerce come much further down the list. GfK analyst Ryan Garner said:

"When we think of trust or security, we probably default to a brand that's been around for a long time. In this case, people have put their trust in a very new company."

This may be due to the recent and high-profile hacking of Sony's Playstation Network, which showed that even the most established brands can quickly lose consumers' trust. While trust currently rests with financial giants such as Visa, this survey shows that newer brands can take their place.

Visa launches mobile wallet

Google, mobile provider Sprint and the Isis group are already doing it, but now Visa have announced they will launch their own mobile wallet system this autumn in the states. The US launch is likely to provide a blueprint for a global rollout of the scheme.

The system will use NFC enabled smartphones for purchases and balance transfers (where users 'bump' their phones). Visa plans to work with a range of banks on the scheme which will support non-Visa cards. The wallet will utilise a username and password system rather than card details to control payments. Users will also be able to specify which accounts are used for different kinds of purchases.

Bill Gajda, Visa's head of global mobile products, said:

"People will use plastic for many years to come but increasingly, we'll be talking about accounts not cards and Visa as a payment platform and provider as opposed to a physical card payment company,"

Dynamics wants to turn card rewards into cash

If you have ever wondered how frequent buyer points or cash back on your cards can be tirned in to real purchasing power, the answer may be here. Dynamics is proposing a new system which they believe will benefit everyone in payments, including the customer. Here is how.

Dynamics will change the mag-stripes on users' cards in order to allow them to use reward points to make purchases. Dynamics' CEO Joe Mullen estimates that 80% of cards offer reward schemes and that a significant amount of users will swap to Dynamics to benefit from the new feature.

Mullen also believes the scheme will benefit card issuers, processors and payment networks because the scheme will lead more consumers to use their products and spend more with them. The increase in spending would be an obvious boon to merchants, too. Dynamics raised $5.7m back in 2008 to begin turning Mullen's vision into a reality and they are currently conducting 'stealth trials'

iPhone 5 won't be ready for NFC payments

A new report claims that Apple's 5th generation iPhone will not include the RFID chip necessary for contactless payments. The news came in a note from Wall Street research firm Bernstein to investors.

Previous reports from other sources have claimed that the iPhone 5 will include NFC technology. Most notably, a report in the New York Times earlier this year claimed that an upcoming iPhone would include the technology although it did not specify that it would be the iPhone 5.

It is certain that Apple are interested in RFID, having filed numerous patents in the field, but this report suggest that users will have to wait until the 6th generation iPhone before they have e-wallet capability.

US retailer's PIN pads tampered with

PIN pads across US chain Michaels Stores have been tampered with. Customers' card details are at risk while using 90 of the company's PIN pads.The craft store chain revealed that some of its pads had been tampered with last week. It has now revealed that 90 pads have been affected in 20 states, with transactions between 8th February and 6th May open to fraud. The company will now be replacing its hardware over the next two weeks.

ECB wants chip-only cards

The European Central Bank (ECB) has called for chip-only cards. They believe that removing mag-stripes from cards issued in the Eurozone will cut fraud. The ECB's executive board member Gertrude Tumpel-Gugerell also called for the creation of a European card scheme to compete with US giants Visa and Mastercard.

The call was made at a joint conference with Oesterreichische Nationalbank (OeNB), the Austrian national bank, and was supported by Wolfgang Duchatczek, the OeNB's vice-governor.

Commerce veterans launch FreeMonee "cash-gift network"

FreeMonee is a new "cash-gift network" which enables merchants to give gifts directly to customers' credit or debit cards, for use with the designated merchant. The scheme has been set up by former eBay CMO Mike Linton, former Visa exec Jim Taschetta, Oracle's Gadi Maier and Clairmail founder Joe Salesky. These heavyweight names have helped FreeMonee raise $11m in funding.

They already have agreements with two of the top six card issuers and is in talks with others ahead of a summer launch. Gadi Maier, FreeMonee's CEO and president, said:

"FreeMonee, and the technology that powers it, is revolutionizing the bank-merchant-consumer dynamic, enabling each to benefit the other. Our AMT gives banks and retailers the ability to give customers exactly what they want."

Card fraud experts warn against risks of mobile payment

60% of leading UK fraud experts believe that mobile payments hold the greatest potential risk of all forms of card fraud, according to a surevy conducted by UKFraud and Card Fraud Conference.

Mobile payments include premium SMS messages, near-field communication (NFC) payments, direct mobile billing and mobile web payments but it is contactless payments via NFC technology which is seen as the biggest fraud risk.

This is mainly due to the fear that anti-fraud and security measures are not keeping pace with the rapidly developing technology of NFC payments.

Google accelerate launch of "mobile wallet"

Google are setting up a new marketing department specifically to promote contactless payments using  their "mobile wallet". The move is aimed at accelerating the European launch of the system. The wallet system will allow users to pay for items and transfer money using their Android smartphones.

Google face a race to be the first to launch their scheme as they face competition from Nokia, Blackberry manufacturers RIM, and mobile network O2 who have all publicised their intent to launch similar schemes in Europe or the UK.

Google have yet to partner with a payment provider, such as Visa or Mastercard, although it is likely they will have to, to run a viable scheme. They will also probably have to pay for the installation of compatible terminals in many locations, as the cost is liable to deter merchants from taking up the scheme.

McDonald's to launch contactless payments in UK

By the end of the month McDonald's will have launched contactless payment in their UK restaurants.

McDonald's UK IT Director, Mark Fabes, hopes the move will improve the customer's experience. However, he believes that the system will experience low usage to begin with:

"The number of cards with contactless capability among the customer base at the moment is low. But we recgonise that contactless near-field communications capability will soon be in many customers' hands. We believe that having this technology now will help drive people into our restaurants."

The firm also believes that contactless payments will allow them to take a fresh look at the promotions and reward schemes they offer. McDonald's are the first fast-food chain to make the move to NFC payments and believe this will give them an edge in the industry, comparing it to when they were first to introduce free wi-fi.

3 Reasons Mobile Payments may not be ready

1. Retailers - Adoption by retailers is obviously key to the success of mobile payments. The companies behind Isis found that retailers didn't want to work with smaller companies (like Discover). A major card company is needed to give them confidence in mobile payments. At the moment it is too risky for retailers to install the requisite technology, especially if they are footing the bill.
2. Mobile Carriers - At the moment network providers are pairing up with card companies. This could cause problems for universal adoption if only certain pairings of network and card companies are useable.
3. Card Companies themselves - Card companies need to simplify the process to make it easier for customers, retailers and networks to adopt. Visa and Mastercard are so dominant in the payments market that a lot depends on them. At the moment their dominance is a barrier to new payment networks.

Visa to reveal m-commerce strategy

Visa will reveal their m-commerce strategy this month, possibly as early as next week. The revelation will be "significant", according to reports of a remark made by Chief Exec Joseph Saunders on a second-quarter results call with analysts.

Whatever it is, the news is sure to be big. Visa are a huge player, able to change the game in the still embryonic world of m-commerce. Phone manufacturers and network providers are all focusing their efforts on it. Although, it has proved more of a challenge than some thought.

Mobile payments market remains wide open

The mobile payments market has opened up since AT&T, Verizon and T-Mobile's recent announcement that they are scaling back their Isis iniative. Various other device manufacturers and solutions providers have announced plans in the same field. In February, Google added NFC capability to its Android operating system. Research In Motion expect a summer release for the Blackberry Bold 9900 and 9930 smartphones which will feature NFC technology.

However, Apple's aspirations in the market remain unclear. In April they began selling the Square credit card reader, which works with iPad, iPhone and Android smartphone, both online and in their stores. It seems unlikely, though, that they would fail to exploit this emerging market with their own products.

US mobile phone operators put payment network on hold

US mobile phone operators have put on hold plans to set up their own mobile payment network. AT&T, Verizon and T-Mobile had been working together on a venture called 'Isis' which would have allowed users to maintain accounts directly with their operator rather than through an intermediary such as Visa or Mastercard. The trio announced Isis back in November but have now decided that it is "too difficult and too time-consuming".

Instead, they are now in talks with both Visa and Mastercard about setting up a 'mobile wallet' system. The new idea is to allow customers store information on existing credit cards through a system embedded in phones.

However, Isis' first trial is still slated to go ahead. The trial, with Utah Transit Authority, will allow users to pay travel fares by tapping a reader with an Isis-enabled phone and uses near-field communication (NFC) technology.

Rival mobile operator Sprint will welcome the news and is believed to be preparing its own foray into NFC technology for launch later this year.

Apple and Sony must work hard to restore users' trust

Apple and Sony have been told by EU officials that they must repair user trust issues. A speech by European Union Justice Commisioner Viviane Reding made reference to recent controversies over Apple's location tracking software and the hacking of Sony's Playstation Network.

She claimed trust in the companies had been weakened and that “those in charge have to take the relevant technical and organizational measures to guarantee protection against data loss or an unjustified access" in order to restore it. Reding also criticised the seven days that Sony waited before notifying customers of the security breach.

Both companies have responded to the criticism levelled at them. Apple have denied any tracking of iPhones and Sony have reported that they are rebuilding the Playstation Network with beefed-up security. However, the issues have still been raised and both companies will have to work hard to restore trust.

Square Takes Note of Security Concerns

It seems Square have taken note of recent concerns over security issues with their product (a card reader which plugs into an iPad, iPhone or Android device). This summer will see the launch of a version of the device which beefs up security through data encryption. The new reader will also only work with Square's official app. The current version will work with any app, something which can be exploited to steal card data. Square currently charges 2.75% per transaction but it is unknown how they will absorb the extra costs arising from encryption.

Benefits of going online mean people ignore security risks

Despite increasing instances of credit card details being stolen, more and more people are happy to trust their details online. Convenience is winning out and people are ignoring high-profile theft, such as the recent hacking of the Playstation Network which saw 77 million users' information stolen. However, there is little they can actually do. Companies only have to be as good on privacy as their competitors and the bar is set low.

"For many companies, it's easier and cheaper to deal with the repercussions of a data breach that's already occurred, rather than taking steps to prevent it," said Ioana Rusu, regulatory counsel for Consumers Union, publisher of Consumer Reports. "Companies need to be held accountable so they protect your data up front."

Visa backs Square

In a significant move, Visa had invested an undisclosed in startup Square. Founded by Twitter's Jack Dorsey, Square offers merchants a piece of kit which pulgs into the headphone jack on iPhones, iPads and Android devices, allowing them to process card payments.

Square is doing well; Dorsey recently revealed it is processing $1 million per day and a reported 10,000 merchants are signing up each month. However, they face competition from similar products offered by Intuit and Verifone. Visa's public display of support should help their market share, despite concerns about the system's security. These have most notably been expressed in a video posted by Verifone and accusing Square of "serious security flaws".

NY Transport Authority Pushes for Contactless Payment

Bus and subway users in New York could soon be using contactless payments to pay for their journeys. The Metropolitan Transportation Authority (MTA) has decided to step up plans which have been trialling since 2006.

It has this week released a Concept of Operations (ConOps) for a contactless, open standards fare payment system. The document sets out provisions for the system's design, creation and implementation and the MTA is asking for firms working in payments to get involved. Comments can be submitted until 25th May and a presentation is scheduled for 10th May which already has AmEx and JP Morgan Chase signed up.

Get the full ConOps here:

1.4 mb PDF download

Trouble Ahead for Contactless

Contactless seems to be just getting into its stride but it may face stormy waters in the US. A provision in the Durbin Amendment could "take the wind out of the sails" of contactless payments, according to Brian Riley who is a senior research director in retail banking and cards practice at TowerGroup.

The Durbin Amendment allows merchants to set card payment minimums in order to protect their margins from interchange costs on small tickets. The highest this minimum can be is $10. On the flipside, once a transaction goes over $25 a signature is required. This would therefore limit the scope for contactless payment to transactions which are $10-$25 rather than the previously expected $0-$25.

The problem becomes apparent when you learn that Riley's research has shown an average contactless payment of $8.42. This news will stall merchant takeup of the technology. The number of merchants choosing to install near-field communication (NFO) readers for contactless payment is already "lacklustre", says Andy Schmidt (also of TowerGroup).

UK Contactless Merchant Plans to Launch Loyalty Trial with Stickers

UK sandwich and coffee shop chain Eat plans to trial contactless loyalty using stickers customers can attach to the back of their mobile phones.

Dan Balaban

Sandwich chain Eat, one of the first merchants to roll out contactless payment in the United Kingdom, plans to introduce a contactless loyalty scheme using passive stickers.

The chain, which has more than 100 UK locations, will use a contactless loyalty and likely also a closed-loop payment system of Zapa Technology. Zapa now mainly serves its home base of Ireland. Eat is to launch an eight-week trial in early May at its new store in Liverpool. Plans call for then rolling out the contactless loyalty system throughout the chain, assuming the trial goes well.

Eat would issue stickers, branded both Eat and Zapa, to customers, enabling them to tap to receive points and redeem rewards. They could also view coupons and rewards, along with account details via a smartphone app on their phones. The chain might also enable customers to pay for sandwiches, soups, salads and coffee with a prepaid stored-value account. That would be in addition to open-loop contactless credit and debit cards the chain now accepts.

“We (want to) have that one-to-one relationship with customers; getting to understand individual buying patterns,” Rene Batsford, head of IT for Eat, told NFC Times.

He said the chain is planning to upgrade its point-of-sale terminal system and this would enable it to support the contactless loyalty launch. The same terminals are expected to accept open-loop contactless applications, such as Visa payWave and MasterCard PayPass. Eat was the first merchant in the United Kingdom to introduce an integrated contactless POS system, which reduces the steps when consumers tap their cards to pay.

Zapa has recorded more than 2 million contactless transactions to date. About 200,000 customers have stickers and nearly 800 merchant locations accept them. They include more than 100 locations of the Insomnia Coffee chain in Ireland. Another 450 locations are gearing up. But the implementations have required standalone Zapa terminals.

Zapa Technology chief operating officer Donal McGuinness, said the Zapa Tags, or passive stickers, serve as a bridge to the coming of full NFC mobile phones. But the company already can link transactions conducted by consumers using the stickers to apps on smartphones, which it has developed for the iPhone and Android smartphones, along with a couple of others, he said.

The transactions go through the Zapa server and to the customers’ handsets. But the move to NFC would enable more integrated delivery of offers and coupons and redemption.

Eat would be the first of the British merchants accepting contactless payment to also introduce contactless loyalty.

Amazon to take on Apple this summer with Samsung-built tablet?

You really should pay attention when Engadget's founder, Peter Rojas speaks about the tech industry. Especially when he leads into a story like this:

It's something of an open secret that Amazon is working on an Android tablet and I am 99 percent certain they are having Samsung build one for them.

The GDGT piece goes on to present a very reasoned argument that paints Amazon, not Samsung or the rest of the traditional consumer electronics industry, as Apple's chief competition in the near-term tablet space. An idea that'll be tough to argue against if Amazon -- with its combined music (downloadable and streaming), video, book, and app ecosystem -- can actually launch a dirt-cheap, highly-customized, 7-inch Android tablet this summer as Pete predicts. Oh, and the fact that Amazon already has our credit card details will certainly make for easy adoption. Hit the source below for the full read or, better yet, stay tuned for the next Engadget Show where we'll be nerding-out with the son of the father of the father of Engadget.