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Canadian Zoompass NFC Trial Shows Carriers Still Interested in Payments

2010 March 3
Zoompass Tag on Smartphone with a POS NFC Reader

Zoompass Tag on Smartphone with a MasterCard PayPass POS NFC Reader

Soon Canadians using the EnStream Zoompass person-to-person (P2P) payment service will also be able to pay using contactless NFC stickers at select locations across Canada.

The Zoompass Tag NFC trial uses 44mm by 33mm stickers made by Giesecke & Devrient and lets Canadians pay at establishments with Mastercard PayPass Point-of-Sale (POS) NFC readers such as Tim Horton’s, McDonald’s, Petro Canada, and Loblaws.

EnStream is owned by the three largest Canadian carriers Bell, Rogers, and TELUS. The Zoompass product lets Canadians send money to each other using mobile phones.

Like almost every other P2P payment product, Zoompass and Zoompass Tag require funding a prepaid account. Users sending money must put funds into the account before sending. Receivers must have an account to access their funds. If a receiver doesn’t have an account when the money is sent, they are prompted to sign up.

ZoomPass Mastercard

ZoomPass Prepaid Mastercard for Mobile Payments

Zoompass Tag avoids one key P2P problem in that it allows users to immediately spend money sitting in their Zoompass accounts using their MasterCard. This is not new however. PayPal has offered MasterCard debit cards for a while now.

So What’s New?

What’s new with this offering is that EnStream is offering phone stickers for use as an alternative to a plastic card.

The most obvious barrier to mobile contactless/NFC payments is that there are no phones with contactless chips in many geographies. Neither the U.S. nor Canada have any contactless phones in the hands of end users.

Ultimately, the only novelty here is that a P2P Payment provider is providing both a contactless MasterCard plastic card and a contactless sticker.

Stickers are a common alternative to the lack of chips in phones. In practice, users put the stickers lots of places beside their phones. A recent Discover NFC trial found that only 44% of users actual put the stickers on their phone. Employee badges were a popular alternative, possibly because the trial was with Discover employees.

Ultimately, the only novelty here is that a P2P Payment provider is providing both a contactless MasterCard plastic card and a contactless sticker. Canadian and American banks have been doing NFC trials for a while now using both cards and stickers.

What’s This All Mean?

Zoompass Tag is further proof that P2P Payments are a huge theme for 2010 in North America. There are many implementations in the works and a few banks are already live, namely CIBC, PNC, First Hawaiian, and FNB Omaha.

A June 2009 study commissioned by CashEdge found that 81% of online bankers want to do P2P payments. Increased availability of P2P products will only increase consumers’ comfort with using it. Use of P2P payments (both online and mobile) will in turn increase comfort with contactless/NFC.

More importantly, the EnStream and Firethorn efforts (which I covered a few days ago) clearly demonstrate that the wireless carriers are still focused on mobile payments.

If financial institutions don’t build mobile payments infrastructure, carriers will — in fact, they’re clearly doing it right now.

Banks need to provide an alternative to their customers if they don’t like the carrier-centric approach.

Banks and other financial institutions need to figure out how P2P and other mobile payments fit into their infrastructure and organization. Institutions also need to understand the positive and negative revenue implications and start managing the approach immediately.

Banks need to provide an alternative to their customers if they don’t like the carrier-centric approach.

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