Taiwanese banking regulators, as expected, have approved the first bank to issue mobile credit cards that could be downloaded over the air to SIM cards.
The Financial Supervisory Commission today approved Cathay United Bank’s application to introduce NFC-enabled mobile payment on SIM cards and for use with the trusted service management service of Taiwan’s largest mobile operator, Chunghwa Telecom. Approvals for at least three other banks are expected this month.
The approval clears the way for an expected announcement later this month by Cathay United and possibly other banks, with Chunghwa Telecom, of the launch of NFC service. That service is likely to start in June.
But it’s not clear whether Cathay United is cleared for more than a large trial or for full commercial service, and whether additional banks will also launch service next month. The NFC services are expected to support MasterCard PayPass.
As NFC Times reported last month, a total of five banks in Taiwan are expected to receive approval from regulators by next month that would allow them to issue mobile credit cards that could be downloaded over the air to SIM cards in NFC phones.
An official with the Financial Supervisory Commission said in April that besides Cathay United, four other major Taiwanese banks, Chinatrust Commercial Bank, Taishin International Bank, Taipei Fubon Commercial Bank and E.Sun Commercial Bank, are expected to be approved to put credit cards on SIMs, most supported by over-the-air downloads and management by Chunghwa’s TSM.
Fubon might not use the Chunghwa Telecom TSM service, however, so it might not be approved with the others. But Fubon is expected to launch NFC with another operator, Taiwan Mobile, and could do so by preloading an application on the telco’s SIMs.
Chunghwa Telecom’s TSM has already been certified by MasterCard for downloading and managing PayPass applications in NFC phones.
Meanwhile, as NFC Times reported, Chunghwa Telecom has said it would launch a separate mobile-payments service based on QR codes that could be used for some transactions in convenience stores and restaurants, as well as for online purchases. A trial is possible soon. The service would be part of a separate mobile wallet.
Some of the same banks planning NFC services with Chunghwa Telecom are also interested in the QR-code based mobile payment for both e-commerce, such as scanning QR codes shown on the screen during TV shopping programs, as well as paying taxi fares and, according to reports, “paying bills” at convenience stores and restaurants by scanning a code at the point of sale, and also in-store purchases. The purchases would be treated as e-commerce transactions.
E.Sun has reportedly already gotten approval by the banking regulator, with Cathay United, Yuanta Commercial Bank, Chinatrust and Cosmos Bank also expressing interest. The QR code transactions would use a third-party payments platform.
Chunghwa sees QR codes as an opportunity to earn additional revenue, possibly on the acquiring side of the payments business.
But in contrast to the sizable base of contactless point-of-sale terminals deployed on the island nation, backers of QR codes would have to sign up merchants.
There are more than 20,000 terminals that support PayPass and Visa payWave in Taiwan, along with a little used contactless application from Japan’s JCB. And Taipei-based EasyCard Corp. runs a closed-loop transit fare collection and retail payment scheme accepted at points throughout the island nation, including 30,000 terminals in convenience stores and at other retail locations.
In addition, Taiwan’s three major mobile operators, Chunghwa Telecom, Taiwan Mobile and Far EasTone; two smaller telcos, Vibo Telecom and Asia Pacific Telecom; along with EasyCard, have together invested at least NT$150 million (US$5 million)–at least NT$25 million each–in a joint venture to build an NFC payments platform. The initial investment is reported to be NT$180 million.
One of the major objectives of the joint venture is to hire a TSM to manage NFC applications enabled by the parties.