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Mobile industry in RFID payment push

The GSM Association has called on manufacturers to build technology for contactless payments into their handsets by the middle of next year
Written by David Meyer, Contributor

The GSM Association has called on phone manufacturers to build RFID technology into handsets from mid-2009, in a bid to kickstart the mobile-payment industry.

The technology, known as near-field communications (NFC), is the same kind of contactless payment connectivity that is built into London's Oyster travel card and the latest generation of bank cards. On Tuesday, at the start of the Mobile Asia Congress in Macau, the GSMA said building NFC into phones would "ensure that consumers can reap the benefits of mobile-payment services as soon as possible".

"There is no doubt that there is a huge latent demand for a large variety of mobile transaction services, of which there is universal interest in proximity payments, as trials across the world have already shown," said GSMA chief executive Rob Conway in a Tuesday statement. "We are committed to ensuring that mobile-payment services are delivered as efficiently and cost-effectively as possible."

Conway added that an industry-wide NFC push would ensure "significant" economies of scale, making it cheaper for manufacturers to include the technology in their products. NFC-enabled payments are already relatively commonplace in the Far East, and recent analysis by Jupiter Research predicted that one in five handsets worldwide would include the technology by 2013.

The GSMA is recommending that manufacturers adopt the Single Wire Protocol standard, which involves a direct connection between an embedded NFC chipset and a SIM card. According to the industry body, this type of NFC would allow "a wide range of secure, interoperable and transparent services, such as credit and debit payments", using existing contactless readers in shops, restaurants and train stations.

The organisation has conducted what it claims were successful trials of the technology in eight countries — including Australia, the US, Taiwan, France and others — under the auspices of its 'Pay-Buy-Mobile' initiative.

This scheme did not encompass recent UK trials, which have been carried out separately and with apparent success by O2, Barclaycard, Visa, Nokia, Transport for London and others.

A GSMA spokesperson told ZDNet UK on Tuesday that NFC-enabled handsets would make their way to the UK as manufacturers started making them: "We as a group haven't looked at the UK market in detail, but the Oyster card has been very successful, and it's the same principle." The spokesperson added that the GSMA expected the handsets to hit the UK in the second half of 2009.

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