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The key role of transit

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[Dave Birch] At a couple of events I’ve been too recently, the key role of transit applications in the NFC world has been reinforced. In some markets, it may well be transit rather than payment that is the initial driving application for NFC handset rollout, which means that the payments guys need to work with the transit guys (both at the simple level of auto-topup but also with more complex value-added services, such as transit-based rewards) to bring the customers on board. Yesterday, another transit-centric NFC pilot was announced yesterday, this time in San Francisco.

Beginning today, pre-selected trial participants will exchange their existing mobile phones for the Sprint trial phones embedded with the NFC enabled smart chip – a chip that will allow them to securely pay for both their fares and their fries. “In BART’s case, a participant will initially have a stored value of $48 worth of BART rides loaded onto their NFC enabled mobile phone,“ BART Director James Fang said. “Once the stored value drops below $10 the NFC technology automatically reloads the phone “˜over the air’ with another $48 worth of rides and the customer will automatically receive our high-value discount, so they will only be charged $45.“

[From => BART Trial First to Use Mobile Phones to Pay for Fares & Food <=]

In case you’re interested, here’s one of the phones that I was playing around with in our office:

Samsung BART phone

Many, many years ago I used to work at BART, so I couldn’t resist posting a picture over on one of my other cyberdens. If you want to see some truly shocking behaviour in the Bay Area in the 1980s, have a look over on my personal work blog.

The example of Japan shows that customers won’t automatically replace their contactless transit cards (which work fine) with an application on mobile phones, even if they really like the applications, so it’s not an automatic win:

Only 350,000 commuters in Tokyo have signed up for a much-touted ticketing service that allows the commuters to download train tickets to their mobile phones and tap the phones to pass through gates, according to giant commuter rail operator East Japan Railway Co [which] had predicted it would sign up 1 million subscribers in the first year.

[From Card Technology – Japan’s JR East Opens Up Mobile Ticketing Service After Disappointing Year]

Similarly, I understand that the commercial launch in Austria has followed a similar trajectory. It’s gone well, following the launch last year

The Telekom Austria Group (VSE: TKA, OTC US: TKAGY) announced today that its mobile subsidiary, mobilkom austria, has launched the world’s largest and most comprehensive commercial package of Near Field Communication (NFC) services in Austria in co-operation with its partners NXP Semiconductors, Nokia, ÖBB (Austrian Federal Railways) and Wiener Linien (Vienna’s main public transport provider). In the next few days and weeks NFC services will become available throughout the country. NFC facilitates short-range communication between electronic devices via a fast and easy wireless connection. Thanks to NFC, many everyday applications will become even simpler: With a single movement of the hand, a mobile phone can be transformed into a railway ticket, tram ticket, pay-and-display parking ticket, lottery ticket and much more.

[From Unstrung – Mobile Applications – Mobilkom Intros NFC Services – Wireless News Wire]

I understand that so far only around 3,000 of the Nokia 6131 handsets have been sold to consumers, so in a way a similar story to Japan: positive, but not overwhelming. I don’t view this as particularly significant, but I’m curious to hear what other people think. Meanwhile, in London, people seem very positive about the Visa/Oyster phones that we’ve been experimenting with, so it looks as if 2008 will see more pilots and pre-launches in the U.K. as well.

Personally, I hope that the interaction between banks and transit spurs even more innovation. Look at the kind of thing that’s going on the transit world — Hello Kitty bag tags with Octopus inside, Oyster watches for London — it does seem like they are having more fun, doesn’t it?

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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