Telefónica (O2) Czech Republic and MasterCard Worldwide have launched a mobile point-of-sale pilot, targeting small merchants in the country, with a device that supports MasterCard PayPass, along with contact EMV and mag-stripe transactions.
The project could be a test of the business case for telcos to distribute mobile POS devices and to recruit small merchants among their subscribers in partnership with acquiring banks. The Telefónica O2 operator in Germany also plans to introduce the service.
Telefónica is taking the lead in the project, which it calls mPO2S. It is working with MasterCard and the latter’s mobile point-of-sale program. The project uses a mobile POS device, iSMP, from France-based POS terminal maker Ingenico. Czech bank ČSOB will acquire the transactions for the targeted merchants, ranging from plumbers to insurance agents to restaurants and retailers with fewer than five employees.
“Telefónica CZ is acting as a value-added reseller of the mobile POS,” Richard Walitza, vice President, mobile payments and innovations for MasterCard Europe for the Czech Republic and Slovakia, told NFC Times. “Telefonica is bringing the merchant to the bank–basically reselling it hardware and software to their own B2B Telefónica customers. Today most of the SME (small- and medium-sized enterprises) are not even visible for the acquiring banks–so they are really new merchants for the acquirer.”
Telefónica O2 has distributed 100 POS devices so far and the telco plans to expand it commercially in December or January, said Walitza, who formerly worked as head of NFC and financial services at Telefónica Czech Republic.
Telefónica helped develop the mobile POS app for Android, iOS and Windows-based smartphones and tablets used by the merchant. The smartphones and tablets communicate with the Ingenico iSMP reader via Bluetooth.
To conduct a transaction, the merchant enters the amount in his phone or tablet using the Telefónica POS app. The customer then inserts, swipes or taps his card on the mobile POS terminal. For amounts above CZK 500 (US$26.09), if the customers are using EMV, he would enter the PIN on the mobile POS device, which is PCI compliant.
If they use the contactless interface on the mobile POS device, customers could tap with either contactless cards, passive stickers or an applet on NFC phones. The device supports Visa payWave, in addition to MasterCard PayPass.
Telefónica, with GE Money Bank, was the first telco to launch a commercial mobile NFC project in the Czech Republic, last January. The project, which preloads a PayPass application on Telefónica SIMs, will expand to a second phase–over-the-air downloads and management of the applet–in the fall. That second phase is now being trialed internally, Walitza said.
For the mobile POS service, merchants don’t pay monthly or maintenance fees, just the merchant transaction fee percentage, he said.
Telefónica Czech Republic plans to expand the service to other acquiring banks, and to Slovakia and Germany, said Walitza.
Among other targets for small merchants are masseurs, photographer, lawyers, architects, painters and builders, health-care workers and IT services providers.