Mobile Phones with Payment Technology Closer to Reality

Mobile phone manufacturer Nokia and semiconductor maker Royal Philips Electronics plan to test a contactless transportation payment system in Germany next year.

The pair are working with Rhein-Main Verkehrsverbund (RMV) public transportation authority on a pilot program that will allow consumers to pay their bus fares with their mobile phone handsets. Contactless chips will be installed in the covers of Nokia 3220 handsets so that bus riders in Hanau, a city near Frankfurt, will be able to pay for their trips by passing their phones within 10 centimeters (or 3.9 inches) of near-field communications smart card readers.

The RMV electronic ticketing application will be securely stored on a smart card in the phone.

US Customers Show Interest

Genie Driskill, COO of Synergistics Research Corp. in Atlanta, Georgia, told CRM Buyer her firm’s May 2004 survey of U.S. consumers regarding contactless payment reveals that only 10 percent of Americans are aware of technology that would enable their mobile phones, PDAs or pagers to make such quick and convenient purchases. However, the survey also showed that many would look forward to the rollout of contactless chips.

Seventy-eight percent believed transactions would be faster and two-thirds said they’d benefit by not having to sign a receipt or use a personal identification number (PIN).

Complexity, Accuracy

“The awareness isn’t large, but it’s a European phenomenon as far as I know,” Driskill said. “There’s relatively limited experience with it among American consumers,” she said, noting that testing has been done in Florida and Texas.

Synergistics’ study pointed to some obstacles mobile phone and chip makers may encounter in introducing these payment solutions to consumers in the U.S.

Eighty-five percent of those surveyed said it might be hard to verify transactions as accurate with no receipt, 40 percent said the technology sounds too complex to work accurately, 54 percent said it might be too easy to spend money on impulse, and 65 percent said the transactions might disrupt calls or present other errors.

Driskill said the simple promotion of the availability of transaction records in the handset or online will help to soothe consumer concerns.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories

LinuxInsider Channels