Vodafone Spain’s recent announcement of the planned launched of its co-branded prepaid NFC payment service SmartPass, could be the first NFC payment rollout from Vodafone, supported by Visa, since the two companies announced a nonexclusive deal to work together on mobile payment in February 2012.
The Vodafone group branch in Spain said it would launch the prepaid NFC application supporting Visa payWave by the end of 2013.
SmartPass will be available to Vodafone's Spanish customers with NFC-capable smartphones. The application allows subscribers to tap to pay with their phones with a prepaid Visa card, funded from their bank accounts. The telco indicated it would issue contactless stickers supporting SmartPass for users without NFC phones.
About 250,000 terminals in Spain already accept Visa’s payWave contactless cards. Most if not nearly all of those terminals accept MasterCard’s PayPass, as well.
A small financial institution with an issuing license is expected to issue the Vodafone prepaid Visa card. By 2014, Vodafone says its Vodafone Wallet would allow users to add credit and debit cards issued by banks in Spain. Also in 2014, the company plans to add loyalty programs, coupons, and offers to the wallet. Vodafone expects the wallet to eventually include identification, as well as transit and event ticketing.
The launch is expected to be the first NFC payment rollout from Vodafone, supported by Visa, since the two companies announced a nonexclusive partnership to work on NFC-enabled mobile payment in February 2012.
UK-based Vodafone is not the only European mobile operator group interested in delving more deeply in the payment business with mobile NFC. Germany-based Deutsche Telekom and Spain’s Telefónica, along with large individual operators, have also done deals with payment schemes, with plans to launch payment services. All of the groups are behind schedule in their launches, however.
Vodafone, with Visa, had originally planned to launch in five European countries, Germany, the Netherlands, Spain, Turkey, and the UK within 12 months following their February 2012 announcement, but missed that deadline.
U.S.-based CorFire, part of South Korea’s SK C&C, announced it was providing the mobile wallet software for Vodafone group. CorFire reportedly said Vodafone planned to launch first in Spain and Germany during the first quarter of 2013. Visa and Vodafone did not confirm this. CorFire announced its role in the project in October 2012, at the same time that Gemalto announced that it would act as TSM for Vodafone group.
As Vodafone told NFC Times, last year, under the plan, Vodafone operators would earn a cut of the merchant transactions fees when consumers tap their NFC phones to pay with the prepaid cards. The Vodafone-branded application is also designed to reduce churn and perhaps tie into loyalty and other value-added programs. The payment application could be used for online and peer-to-peer payments, as well.
Earning transaction revenue, enhancing their brands, reducing churn and anchoring mobile-commerce platforms are also the reasons other telcos plan to get into payments. Everything Everywhere, the UK's large mobile operator, launched a prepaid payments service in July. The telcos all say they will open the secure elements on their NFC SIMs to banks or other payment issuers.
Vodafone has plans to introduce SmartPass on NFC phones elsewhere. In October, its branch in Italy disclosed plans to launch the payment service commercially on NFC phones in 2013, starting with a trial in Milan. Vodafone Italia has already launched contactless SmartPass card, in January of 2012, with partner CartaSi.
As with the co-branded cards, the mobile NFC payment service will support MasterCard PayPass. Vodafone in Italy had a separate deal with MasterCard Worldwide to assist it in rolling out payment before the group concluded the deal with Visa. It’s unclear whether Vodafone Italia plans to meet the 2013 deadline for the commercial NFC launch.
And outside of Europe, Vodafone, Visa and the Bank of New Zealand, or BNZ, are holding a small-scale employee trial of the SmartPass application. Nearly 200 users, many of them employees of the bank and telco, are using the prepaid Visa payWave application, issued by BNZ, on NFC-enabled Samsung Galaxy S III and HTC One smartphones.
The trial will continue for two to three months before a possible commercial launch. Like the Vodafone Spain launch, SmartPass in New Zealand will eventually be open to credit and debit cards from other issuers, including PayPass cards from MasterCard.
Vodafone is also participating in another mobile payment project, TSM NZ Unlimited, which is a joint venture with telcos 2Degrees and Telecom New Zealand and payments provider Paymark to develop a common infrastructure for mobile payments. Paymark, in turn, is jointly owned by New Zealand banks ANZ, ASB, BNZ, and Westpac. A TSM platform from the joint venture is expected to launch sometime in 2014.
And last November, Vodafone announced it would commercially launch its SmartPass app and service in Australia and would hold a trial involving about 100 Visa and Vodafone employees using Samsung Galaxy S IIIs, with the payWave application issued by ANZ Bank. Vodafone at the time did not set a target date for the commercial launch. A spokeswoman at the time told NFC Times that the launch could occur “as early as” 2013.