Positive Results of Atlanta NFC Pilot Could Spur More U.S. Tests

A nine-month trial of contactless payments using near-field communication (NFC) technology in Atlanta ended this week with what its participants are calling positive results, including an apparently enthusiastic reception from the pilot's 150 users. Meanwhile, the results of the Atlanta pilot may be spurring banks, the bank card networks, handset makers, and wireless carriers to speed plans for more NFC trials in the U.S. Mohammad Khan, president and founder of ViVOtech Inc., which supplied much of the equipment for the Atlanta pilot, says a second NFC trial could start in the U.S. by the end of the year, though he refused be more specific. “Activities are under way,” he told Digital Transactions News. While Khan and other NFC backers last year predicted U.S. pilots beyond Atlanta would get under way in 2006, none has so far been announced, though trials have started in overseas markets. Khan says the organizers of the NFC trial at Philips Arena in Atlanta, which involved JPMorgan Chase & Co. Visa accounts loaded into Nokia 3220 cell phones, have agreed not to reveal transaction statistics from the trial. But he says a chief result was that all age groups and persons with both tech and non-tech backgrounds felt comfortable using the devices not only for contactless purchases at stadium concession stands, but also for digital-content downloads from so-called smart posters deployed throughout the arena. “It didn't matter whether [they] were young, or tech-savvy or not,” he says. “They not only felt comfortable [with the technology], they found it useful. I was nicely surprised.” Focus-group interviews toward the end of the trial, moreover, revealed user interest in a broader array of payment types and places to use their handsets for payment. “They wanted to take it closer to a real-life environment,” says Khan. Because of this user acceptance, he says, work on other U.S. trials may now accelerate. “This trial was very important because it was the first trial using NFC phones,” he says. “We're getting feedback. The road is being paved as we speak for making the technology widely available, [but] consumer acceptance was key.” The next step in any NFC test will be to develop the capability to download payment accounts, including credit and debit account data, via cell networks to users' handsets?a process known as over-the-air personalization (OTA). “I should be able to press some buttons and download a card,” says Khan. This step is critical, since it means issuers will be able to load users' phones with cards rather than send plastic through the mail, shaving costs and fraud risk and adding to customer convenience. But it's also tricky, since banks don't own customers' handsets and so have less control over this form of personalization. The Nokia phones used in Atlanta came pre-loaded with users' Visa accounts. The Atlanta pilot, which kicked off in December (Digital Transactions News, Dec. 14, 2005), allowed users to make contactless purchases of hot dogs, drinks, and other concessions with their phones. It also allowed them to download digital content such as games, ring tones, and player animations from posters that had been equipped with NFC chips for this purpose, with downloads handled by Cingular Wireless. Participants in the pilot were holders of Chase Visa accounts as well as Cingular subscribers. To keep things simple, says Khan, phones were equipped with a stripped-down version of ViVOtech's electronic-wallet software and held only one payment account. Santa Clara, Calif.-based ViVOtech also supplied the contactless point-of-sale transceivers for the concessions stands and the server that handled transactions. Devices with NFC chips can establish radio links to each other automatically, allowing for two-way transmissions of content or data with little or need for users to fumble with keys or buttons. The technology works only at extremely short range.