Contactless payment gets ready for London 2012

Trials indicate that mobile payments can be quicker than cash

Europe's largest trial of near-field communications (NFC) technology for mobile payments represents the first step towards a commercial rollout in time for the 2012 Olympics in London.

The Games would make a good project target, and could be the catalyst for a full rollout throughout the UK, according to Claire Maslen, head of NFC at Telefónica O2 UK.

The trial took place in London between November 2007 and May 2008 with 500 people using a Nokia 6131 NFC phone to make retail purchases or pay for travel.

Those taking part in the trial could pay for travel on buses, trains, trams or the tube by swiping the NFC-enabled phones on standard Oyster travelcard readers.

With a little less than four years until the Games, Maslen said that the Olympics is well within the timeframe for a rollout.

Market research firm GFK surveyed the triallists and found that 90 per cent of them were "happy using NFC technology on a mobile phone", while 78 per cent were "interested in using contactless services if available". Convenience, ease of use and social status were seen as the main benefits.

During the test, travel and retail purchases not requiring user authentication were limited to payments under £10, a convenience factor that led to 41 per cent of the users saying the system was faster than paying with cash.

But grumbles included lack of handset choice, too few places to top it up, and an immature interface.

"The interface needed more development for the potential services that could be offered," said Maslen.

Will Judge, head of future ticketing at Transport for London (TfL), said the NFC mobile payment trial results were no surprise. "Our experience shows that customers love contactless," he said.

TfL could also provide information and fare payment services directly from the handset in future.

The technology would also benefit credit card customers, according to Visa Europe's vice president for payWave and mobile, Guido Mangiagalli.

"It would allow the consumer to look at past transactions and account balances in real time, giving them much more control over their spending habits, " he said.

Maslen added that the next step is to form a task force, initially from the trial partners, to work across various industries and discuss implementation issues.

But the key to success will be involvement from the high street. "We need two or three big retailers to come onboard," she said.

Juniper Research telecoms analyst Howard Wilcox suggested that the results are heartening, but that more work is ahead.

"The industry needs to convince consumers and merchants of the merits of yet another payment method on top of cash, cheques and cards, and to allay understandable, even if unfounded, fears about the security of mobile wallets," he said.