Evan Schuman's StorefrontBacktalk

A common theme among contactless and mobile payment trials is that the plans are often less aimed at taking transactions from credit and debit cards than converting cash purchases into electronic transactions. In the French Payez trial, they are trying to figure out the amount limit to require a PIN.

“If the amount is less than EUR20, the customer simply places the phone in front of the terminal and the payment is made and the receipt is printed out. The process is similar to that of the contactless cards such as MasterCard’s PayPass, Visa’s PayWave or, in the U.S., AmEx’s Expresspay. If the amount exceeds EUR20, the participating customers in France enter a PIN on the mobile. To complete payment, the shopper then places the phone in front of the terminal once again. The payment is made and the receipt will then be printed out,” the report said. “The promising combination of passive mode for small amounts and active mode for large amounts seems to be a sensible support for the retailers’ aim to phase out cash. However, not all stores participating in the French Payez Mobile are willing to risk unauthorized payments of below EUR20. In these cases, the customer has to activate a ‘pay’ function on the phone’s menu, enter a PIN and finally place the phone in front of the terminal. Compared with earlier WAP or SMS-based forms of mobile phone payment, this procedure is very lean, user-friendly and, last but not least, very quick.”

In Japan, some major chains have taken trust-but-verify to the next level. A couple of years ago, the largest grocery retailers in Japan, AEON and Seven & I, both started their own mobile electronic payment systems called WAON and Nanaco.

“Differently from the European approaches, the Japanese Nanaco and WAON e-cash systems are pre-paid,” the report said. “The customer first has to top-up the card or phone before using them for payment. If a mobile phone is used, its credit can be topped up from anywhere using a credit card.”

Germany’s Metro Group has been pushing mobile payment for years. Metro Group gave about 100 customers Nokia mobile phones, but they had to “feature not only NFC technology, but also cameras with auto-focus. Only with auto-focus are the phone’s cameras able to replace laser technology for barcode scanning,” the report said. Metro also had to make sure that the in-store systems, which gave customers product information and the latest pricing discounts, would be automatically deactivated once the consumer left the store “to prevent competitors from gaining access to sensitive pricing information.”