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Telenor reports results of Oslo NFC payments trial

“Mobile payment is something that people want and will use, if the solutions are adequate,” says Telenor’s Viktoria Erngard. “But in order to succeed in the long run, we need to get as many merchants on board as possible and offer more NFC-enabled phones.”

Telenor

TELENOR: “Security is a very important issue”

Analysis of feedback from the 250 residents of Oslo, Norway who participated in an NFC pilot run by mobile network operator Telenor and DNB bank has found that both consumers and merchants were positive about the experience, but that partnership agreements will need to be put in place to make NFC payments a reality.

“What we learned from our pilot project was that mobile payment is something that people want and will use, if the solutions are adequate,” says Viktoria Erngard, Telenor Group’s vice president of financial services. “But in order to succeed in the long run, we need to get as many merchants on board as possible and offer more NFC-enabled phones.”

“Security is a very important issue to address going forward, and we will. People were skeptical when bank cards were first introduced, so there’s also a learning curve involved with any new technology,” she adds.

“This trial also told us that we shouldn’t be too quick to target a certain demographic with NFC. We initially assumed it would be young people who want to try new things, but we actually found that this is interesting for everyone. There is just a cool factor, as well as level of convenience, that’s appealing when paying with a phone.”

But, in order for NFC to become an everyday part of our lives, Telenor cannot go at it alone, Erngard adds. It is a payment solution that requires more operators, more banks and more merchants to be on board in order for it to spread and become truly convenient for users.

“We need new merchants, new offers, new things all the time, or else it dies. This can’t only be Telenor and DNB; everyone needs to be on board.”

The Tap2Pay pilot ran from July to August 2011 and enabled participants to make purchases with a Samsung S5230 NFC phone at a dozen merchants in Oslo. Consumer and merchant feedback included:

  • 97% of the participants said that they want to use this type of service when it is launched.
  • 84% of the test group reported that the service was easy to use. They found it faster to pay by mobile phone and liked not having to use a pin code. One participant noted that it felt “futuristic, like science fiction” to pay with the mobile phone.
  • Approximately half the users experienced some technical issues during the trial, typically regarding software installation or lack of contact between the phone and the terminal in the shop. There was a dedicated customer service team available during the trial period, and 86% of the people who sought support reported that they received adequate assistance.
  • The average test group user made a total of six purchases during the trial, resulting in a total average spending of 400 Norwegian kroner (US$65) per person. Most of the transactions occurred at the convenience store Deli de Luca, a chain that sells food, beverages and other small items for people on the go.
  • One of the main concerns voiced by the test group users revolved around the issue of security. Testers were concerned that if their phone was stolen there would be no barriers to fraudulent use of the phone for payment as there is no pin code. Most believed the addition of a pin code would answer this concern.
  • Merchants were largely positive. Most felt that the speed and simplicity of the service was convenient, as it gave them more time to pay attention to the customer instead of the transaction. The service created a “buzz” among customers, and one merchant reported that the mobile payment solution became “the talk of the town”.

Telenor is now working towards a full commercial NFC rollout in Oslo and the surrounding areas “sometime in 2013″.

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