Smart tests over-the-counter payment service using mobile phone

Smart Telecommunications Inc. announced Tuesday that it is testing a service that allows consumers to make contactless payments via their mobile phones.
According to the country’s leading mobile network operator, the trial is part of the Pay-Buy-Mobile initiative of the GSM Association, the global trade association of GSM mobile phone operators. The project aims to promote the use of near field communication (NFC) technology for mobile payments, advocating the use of subscriber identity module (SIM) cards as a secure storage device for payment applications integrated in mobile phones.
NFC is a wireless communication technology which enables data exchange between two devices over a distance of a few centimeters from each other. For the project, Smart said that they will be using Nokia phones which support NFC.
The trial is also being conducted on MasterCard® PayPass(tm) mobile payments, MasterCard’s contactless payment platform for NFC-enabled phones.
With the new service, Smart said that customers will simply need to hold their NFC phone near a contactless card reader such as a point-of-sales (POS) terminal to activate the processing of a transaction. They will then receive a text notification for every successful transaction. The speed and convenience offered by this method of payment is particularly useful in cases where a large number of transactions have to be processed such as malls.
“NFC-enabled cards guarantee the high level of security required for cash-equivalent transactions. With this innovative project, we are preparing for a technology that can simplify payment transactions and in the long run, further spur the growth of mobile commerce in the country.” said Jojo Malolos, Smart group head for financial services.
Smart said that German company Giesecke & Devrient (G&D) provided the NFC-enabled SIM cards, while NFC integrator Venyon handled the secure download and administration of the NFC applications over the mobile network.
“Trusted service manager (TSM) services utilizing over the air delivery channel provides a secure and easy-to-use solution for the banks to download and manage their applications on the NFC-enabled mobile phones. The SIM card is a natural choice for the secure storage and processing of the payment application and can be extended for other NFC applications and therefore increasing the consumer value,” said Venyon CEO Lauri Pesonen.
Smart said that the actual mobile payment application is securely stored together with the customer’s data on a ProxSIM NFC-enabled SIM card supplied by G&D. The ProxSIM card communicates with the NFC controller integrated in the phone using the single wire protocol (SWP).
“With SMART’s choice for a solution where the contactless payment application is stored on the SIM card, the provider’s customers will be guaranteed the maximum of security and flexibility when using their phones for mobile payment transactions,” said Dr. Klaus Vedder, head of G&D’s Telecommunications division.
Smart, a wholly-owned subsidiary of the Philippine Long Distance Telephone (PLDT) company, has 34.2 million subscribers in the country as of end-September 2008.-abs-cbnNEWS.com