Elisa, one of Finland’s largest mobile operators, hopes to introduce its own payment application on SIM cards in NFC phones around the end of 2012, following the planned launch of contactless payment stickers in September.
The telco plans to make the passive stickers available to up to 100,000 university students throughout Finland who carry the Lyyra student card. The stickers will be part of the telco’s Elisa Lompakko payment service, which also enables users to make online payments and transfer funds to other users on their computers and smartphones.
MasterCard Worldwide is supporting the payment service, including purchases in physical stores–with the passive stickers storing MasterCard’s PayPass contactless application.
Students who agree to take the free stickers will be able to tap to pay with PayPass at campus cafeterias and what Elisa’s executive vice president for subscription business, Henri Korpi, told NFC Times is a growing number of campus and other locations that have installed point-of-sale terminals supporting PayPass. He said Kesko, one of Finland’s largest retail groups, which includes grocery stores, has installed PayPass terminals, as has Finland’s government-controlled alcohol retailer, Alko.
The stickers would be available to subscribers of other mobile operators, he said, and, presumably, not just for students in the future.
Korpi said he expected the telco’s payment service to be added to SIM cards in NFC phones around the end of the year, though “the exact timing is yet to be determined.”
He didn’t release any other details on the planned NFC launch, including the types of models of NFC phones that would support the NFC SIM cards carrying Elisa’s payment application.
The telco’s payment application on the SIMs would be expected to support PayPass and would either be prepaid or credit, Korpi indicated.
The telco’s wholly owned subsidiary, Elisa Rahoitus, or Elisa Finance, will issue the application, Korpi told NFC Times. That payment application would start out as prepaid, but he said Elisa Finance is licensed as a payment service provider from Finland’s financial regulator, the Financial Supervisory Authority. This would enable the subsidiary to issue a credit application, Korpi said.
If true, Elisa could issue a credit application for the contactless sticker and could later move that application to NFC phones–though it’s unclear whether Elisa’s subsidiary needs a banking licensing to issue an actual credit application. It appears to have only an e-money license, according to the Financial Supervisory Authority’s Web site.
In either case, the planned launch would be another example of a mobile operator entering the payments market with NFC phones. Telcos in Europe are planning to use the more liberal regulatory environment in the European Union to become payments players by getting licenses to become e-money or payment institutions.
One of the latest to announce its intention to enter the payments market is Deutsche Telekom, which in early July said it plans to use its ClickandBuy subsidiary to issue payment applications in the European markets where the telco will launch NFC, including Poland later this year and Germany next year. The application will support MasterCard PayPass. ClickandBuy already has an e-money license that covers Europe.
Mobile operators in other countries also plan to enter the payments market, at minimum with prepaid applications supporting either MasterCard PayPass or Visa payWave–or even their own payment brands, which telcos in Germany and Sweden plan to do.
In Finland, Elisa’s Lompakko service is also an online payment service, which enables users to “create online payment cards with validity periods and payment limits of their choice,” said the telco in a statement.
The users load funds to their Elisa Lompakko accounts on their PCs or mobile phones that they can use to make online payments and peer-to-peer funds transfers and, later, physical payments with the contactless stickers and NFC phones.
On mobile phones, Elisa secures the loading of funds and other online activities with a “mobile certificate,” which is an electronic identity card stored on the users’ SIM cards, said the telco. This certificate offers a “strong electronic identification tool,” said Elisa.
“The certificate can be used for online identification and purchase confirmation and as an electronic signature in agreements made in phone or online services.”