Bangalore: Mobile payments company mChek India Payment Systems Pvt. Ltd recently sent some of its staff on a working lunch to a restaurant and when it was time to pay, they didn’t flash a company credit card. Instead, they tapped a mobile phone on a contactless reader.
The mChek employees were testing a technology called near field communication (NFC) that could potentially turn mobile phones into smart wallets.
Much like Bluetooth, NFC is a short-range wireless application that allows devices to transmit data, but intuitively and without the need for manual configuration. Several companies in India, including mChek, are now field-testing NFC applications.
Once fully developed, NFC will allow users to make instant payments by tapping a mobile phone against a reader terminal—similar to how commuters on Mumbai’s suburban railways and buses can swipe prepaid smart cards against fixed or handheld readers to buy tickets.
“We are looking at more pilots...”, said Sanjay Swamy, chief executive at Bangalore-based mChek. “In this trial we tested the usability and the viability of the technology.”
He didn’t want to reveal the handsets used or the name of the restaurant, but said the firm is now looking for a business model around NFC.
“As the single fastest growing mobile phone market in the world, India is well suited to commercial adoption of the NFC technology,” Jeff Semenchuk, executive vice-president and head of growth ventures, Citi Innovation, at Citibank NA, said in an email. “We hope to explore its potential…for our customers in India in the near future.”
India has at least 391 million mobile phone connections, according to the Telecom Regulatory Authority of India. And with 15 million users added just in March, it’s home to the world’s fastest growing mobile phone industry.
Sam Pitroda, chairman of the National Knowledge Commission and widely credited with giving the early push to India’s telecom sector in the 1980s, is an early believer in both the technology and India.
His Chicago-based C-SAM Inc., in a tie-up with US-based Discover Financial Services Llc, has already conducted trials with 1,000 customers at retail outlets in Riverwoods, Illinois. The mobile payments firm’s local arm, the Mumbai-based C-SAM India Pvt. Ltd, is talking with various banks in India to begin trials.
Nokia Oyj, the world’s largest handset maker, is also carrying out NFC trials in India. The firm has conducted at least 20 trials globally, including one with State Bank of India.
G.K. Chakrapani, Nokia India Pvt. Ltd’s director of corporate business development, said the handset maker is evaluating “consumer and ecosystem adoption” from its trials and he’d be able to share details only later.
Handset makers such as Nokia play a key role in the adoption of NFC technology. In its current state, the technology works only on select devices. Nokia has at least two models—6131 NFC and 6212 Classic—and Samsung Electronics Co. Ltd has some including the SGH-X700n that are NFC-compatible.