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Sitges trial results: Consumers pay more often and spend more with NFC phones than with cards

Telefónica, la Caixa and Visa’s NFC payments trial in the Spanish resort of Sitges has seen significant increases in both transaction frequencies and purchase values but, the partners say, a mass deployment of NFC services is still three to five years away.

Sitges NFC payments trial

SITGES TRIAL: 85% of users were happy with the security of NFC payments

The six month trial of NFC mobile payments which has been taking place in the Spanish resort town of Sitges since the end of May 2010 is now complete and the results of a survey of participants in the trial have now been released.

For the trial, more than 1,500 customers of both mobile network operator Telefónica and La Caixa bank were equipped with Samsung S5230 NFC phones loaded with la Caixa Visa cards and 500 merchants in the town were equipped with contactless POS devices capable of handling NFC payments.

The results of the Mobile Shopping Sitges 2010 project “indicate that the project was highly successful among all the participants”, say the project partners, and both the NFC phones and payment terminals used in the trial are to be left in circulation so they can continue to be used on an on-going basis.

Research conducted amongst consumers and merchants who participated in the trial found that:

  • Customers used the Visa cards stored on their NFC phones to carry out 30% more transactions, with a 23% increase in the average purchase value, than they had with their traditional plastic cards.
  • 90% of consumers issued with an NFC phone used their phones to make payments
  • 80% of the merchants taking part in the project processed an NFC transaction
  • Users mostly made micro-payments with their phones: 60% of the purchases were for amounts equal to or less than €20, although there were also many for large amounts.
  • 75% of transactions took place during the working week.
  • Consumers made the largest number of purchases at supermarkets (57%) and restaurants (14%).
  • The average age of customers using their mobile phone to pay for their purchases was 46.
  • 85% of users said they considered the protocols for operating with the NFC system to be sufficiently secure.
  • 90% of users said they would continue to use their mobile phone for payments.

“The results obtained in Sitges reinforce the assumptions of the companies behind the project that mobile payment could be rolled out massively in Spain over the mid term,” say the partners, “in the next three to five years.”

There is, however, no word as yet regarding an expansion of the Sitges project to include the city of Barcelona, 35km along the coast from the resort, which was originally expected to follow the initial six month pilot.

  • http://bit.ly/g83nUN Infosys Press Team

    Telefonica, La Caixa and Visa NFC payments’ mobile payments trial are proof that making payments using a mobile phone is no longer a vision for the future: it’s happening now, and with great success.

    With 85% of users saying they considered the protocols for operating with the NFC system to be sufficiently secure, and a further 90% of users saying they would continue to use their mobile for phone payments after the official end of the trial, it’s clear that the technology and banking industry have found a way to reduce the potential of fraudulent activity and mitigate security concerns that have been holding back the uptake of such technologies for so long.

    This is further underscored by the average age of the user. We all expect mobile phone users in younger demographic groups to adopt new technologies more readily than those in older demographic groups. But with the average age of the user standing at 46 years of age, it is clear that the trial has won over a harder-to-reach audience with a stronger built-in resistance to technology.

    This is good news for retailers, banks and users alike, since we all stand to benefit from the ease of use provided by mobile payments. The solution provides richer interaction possibilities for loyalty programmes and coupon applications – a point worth considering as the penetration of mobile phones continues to increase and fragment established demographic profiles.

    ________

    Comment from Hemant Lamba, Banking and Capital Markets Practice, Infosys, and posted by Infosys Press Team

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