After Two Months, Signs Are Positive for Multi-Account NFC Pilot

While hard data are not yet available, anecdotal evidence indicates consumers are pleased with a mobile-payments pilot in San Francisco using phones equipped with near-field communication (NFC) technology and involving the Bay Area Rapid Transit rail system and Jack in the Box Inc. fast-food restaurants. “We've supported thousands of rides and hundreds of smart-poster taps” since the pilot started in late January, says Dom Morea, senior vice president in First Data Corp.'s mobile commerce solutions unit, which the processor recently set up to run its mobile initiatives. First Data is processing stored-value transactions for Jack in the Box. Speaking to Digital Transactions News at the Electronic Transactions Association trade show in Las Vegas this week, Morea and Barry C. McCarthy, president of the mobile commerce solutions division, said consumer-research from the pilot isn't yet available. But they say the signs are positive. “It would appear to very easy for consumers to use,” says McCarthy. “We're very encouraged.” Indeed, he says BART commuters who were not part of the pilot approached him on the day the project launched to ask how they could participate. At the same time, employees in the Jack in the Box stores have had little trouble handling transactions, Morea says. The outlets had already been equipped to accept contactless card payments. In the four-month pilot, some 230 BART commuters are using Samsung SPH-A920M cell phones equipped with NFC chips to tap readers mounted on any of 500 turnstiles to pay their fares in all 43 BART stations. The handsets can also be used to pay for meals at San Francisco-area Jack in the Box outlets. So-called smart posters hung in train stations let users download directions to five area Jack in the Box locations as well as digital content from Sprint Nextel Corp. Reston, Va.-based Sprint is handling over-the-air (OTA) downloads for the pilot. Smart posters are signs embedded with NFC chips that interact automatically with NFC handsets to download content from marketers. Users are being issued the Samsung handsets along with access to a BART account in the phone's mobile wallet loaded with $48 in value. Once the value drops below $10, BART charges another $48 to a credit card designated by the participant. Jack in the Box transactions are funded from a separate account in the wallet linked to a Jack's Cash proprietary prepaid card. The pilot differs from other NFC tests run so far in two respects: it doesn't involve either Visa Inc.'s payWave or MasterCard Wolrdwide's PayPass contactless payment platform; and its wallet incorporates two tender types, one for BART fares and one for the fast-food outlets. “We're trying to prove consumer acceptability, consumer adoption and usage, and [the feasibility] of multiple payment types across multiple partners,” says McCarthy. McCarthy adds he does not expect NFC-equipped handsets to become available in commercial quantities until late in 2009, though he says this is “just a guess.” To help prepare consumers for the concept of handset-based payment at the point of sale, First Data has introduced what it calls a Go Tag, a sticker that can be affixed to the back of a phone to make it capable of contactles transactions. Approximately 2,000 First Data employees are using Go Tags at company cafeterias in Denver and Hagerstown, Md. The sticker is a sort of half-way house to NFC, since it permits the phone to used as a contactless-payment token but doesn't communicate with the phone's operating system, as would an embedded NFC chip. The idea of using a sticker for contactless payments with a phone has also been adopted by Mobile Candy Dish, a provider of mobile-services software (Digital Transactions News, April 10) and Heartland Payment Systems, which is using a similar technology in its contactless payment project at Slippery Rock University (Digital Transactions News, Aug. 22, 2007).