Singapore's M1 finally pilots NFC

update MobileOne is the last of country's three mobile operators to begin mobile payment trial based on near-field communication technology.

update SINGAPORE--Local telco MobileOne (M1) today launched a mobile payment pilot based on near-field communication (NFC) technology, alongside partners Citibank and Visa.

Starting in May, the three-month trial will allow 300 pilot users to tap and pay at 750 merchants equipped with Visa "payWave" readers across the country, according to company executives at a joint press briefing.

The 300 users were selected at random from a pool of some 50,000 Citi M1 Platinum Visa cardholders. They will be given Nokia 6212 handsets outfitted with NFC chips linked to their card accounts.

Each transaction is capped at S$100 (US$65). No signature is required after the transaction has been processed, but the devices can be set to be locked with a PIN code that is required for each payment.

With today's announcement, M1 joins Singapore's other two mobile operators--SingTel and StarHub--both of which kicked off their NFC pilots in late-2007.

Unlike SingTel and StarHub's, however, M1's trial is the first to link up a credit card. Its competitors' trials were based on debit stored payment.

Gordon Cooper, Visa's regional head of mobile payment, emerging products and technology, is optimistic about the commercial viability of the tie-up. He told ZDNet Asia, on the sidelines of the briefing, the project leverages current infrastructure already in place, such as existing Visa reader terminals.

NFC as a standard is now also more stable, Cooper added. "The basics are falling into place," he said.

P. Subramaniam, M1's chief marketing officer, said the Visa partnership offers users a more "standards-based" choice, making adoption more likely.

The Singapore government in February pledged to "facilitate" the development of a common infrastructure to help drive interoperability between NFC services in the island-state. National ICT regulator, the Infocomm Development Authority (IDA), said it would aid in the establishment of a Trusted Third-Party (TTP) backbone, as well as the adoption of contactless payment standards such as Cepas, Visa payWave and MasterCard PayPass.

Cooper said the trial was "complementary" to the IDA's vision, and that the payment vendor shared its vision to drive open standards and interoperability in the realm of mobile payment.

A StarHub spokesperson told ZDNet Asia in an e-mail that the telco has decided, after its "extensive [NFC] trial" last year that the payment mode has "good potential but the right ecosystems need to be in place". He added that StarHub is working closely with the IDA and "various partners" to establish this ecosystem.

SingTel did not respond by press time.

Interoperability has been highlighted as a crucial factor in the eventual commercial success of NFC-based mobile payments. Industry experts have said a closed-loop system without the full participation of all relevant players, will stunt the viability of such projects. To date, all NFC trials in Singapore have limited users to one handset for payment.

The M1-Citibank partnership may not remain exclusive after the trial ends. John Denhof, business director of credit payment products at Citibank Singapore, said it was "hard to say" if the card vendor would keep the service exclusive to M1 upon the trial's completion. But, Denhof added, the 10-year relationship between the two companies made M1 a "natural" choice for the pilot.

Visa has run similar contactless payment trials in countries in the region, including Malaysia, Taiwan and Korea.

Currently, Japan is the only country in Asia that operates a commercial contactless payment service.