Transport applications key to pioneering mobile phone transactions scheme in Nice

France is pushing ahead with plans for a nationwide contact-less payment project and transport is a key area.

Transport applications are a core element of a pioneering system for payment and transactions technology that is being introduced in Nice this year, based on mobile phone contactless services. French mobile operators will market the first NFC handsets for use by several thousand customers. These customers will be able to discover, for the first time in France, a multi-service offer of mobile contactless services including transport and retail payments, banking, information exchange and relationships with the local authority and other community services.

The system is intended to be rolled out later in the rest of France, and could be the basis of a European wide facility that will revolutionise the way that transport journeys are paid for and information and relationships are developed with users.

Cityzi is a brand created by the French Association for Mobile Contactless (AFSCM) to facilitate the recognition and adoption of mobile contactless technology by the general public. This brand will indicate to customers where they can use trusted mobile contactless technology.

France has taken the lead, through the AFSCM, in bringing together the many potential stakeholders around a single solution and an open mobile NFC ecosystem. The Nice scheme is thus a pioneer in Europe for the development of the mobile contactless service market.

Mobile contactless transactions have been implemented most to date in Asia and are rooted in daily life in Japan, which is a pioneering and leading country in the domain. The Felica contactless mobile system, offered since 2004 by NTT DoCoMo and Sony, can reach 48 million compatible telephones, with around 10 million active users of the service. The handsets are commonly used on the Tokyo rail and metro service, in some supermarkets to pay for purchases, by brands for their digital loyalty programmes and in the security sector. Similarly, South Korea launched mobile NFC in 2006 and already has 12 million users of mobile contactless payment services.

Mobile NFC pilot programmes have been launched recently in China, notably in Shanghai and Beijing.

While mobile contactless services have been launched in Asia with a proprietary solution involving a limited number of companies, the AFSCM is promoting an open solution based on international standards (see panel below).

Elsewhere in the world, various pilot programmes are being developed to test the many uses of mobile NFC, but they are generally limited in extent.  In the US, pilot programmes in the transport sector enable passengers to pay for travel passes with their mobile phones. These programmes have been developed by some banks and transport companies in San Francisco, Atlanta, New York and Washington. In the UK, the government has recently launched a public consultation on NFC, but currently, only bilateral partnerships have been implemented in the UK (see panel).  In Germany, the national ‘Touch and Travel’ paper free ticketing project has so far been trialled through around 500 testers, but the pilot programme is due to be rolled out across Germany this year.

The French industry believes it is well placed for the fast development of mobile contactless services, including availability of a non-proprietary solution, which is open and interoperable, and a powerful industry in the smart card sector. It has meanwhile achieved the engagement of internationally renowned industrial stakeholders, banks, retail groups and mobile operators, plus a public transport system which has successfully developed contactless technology. Five million contactless cards and 50,000 card reader devices are now in use.

The project has the support of public authorities and the government and the establishment of the Contactless Mobile Services Forum in 2008 placed NFC technology at the forefront of the 2012 Digital France plan.

Involvement of stakeholders from across the telecom sector and the associated equipment suppliers has included the manufacturer of readers that are deployed by service providers in buses, stations, stores and other locations where mobile NFC services can be used.

This year’s launch of Mobile Contactless Nice is set to be the pre-commercial launch of a French national mobile NFC multi-service offer. The first commercial mobile NFC handsets will be marketed to 500,000 residents in the Nice metropolitan area along with a set of very useful mobile NFC applications.

The scheme builds on many successful mobile NFC trials in France over the past few years, which tested both the technology and different uses.

The initiative in Nice is markedly different due to the scale of the project, and in addition is not merely focused on a single application such as ticketing or in-store payments, but is large scale, and for the first time brings together the three French mobile operators: Bouygues Télécom, SFR and Orange.

The scope of the initiative covers the entire urban community of Nice, including the city as well as the 24 neighbouring communes. NFC-enabled mobile phones will be commercially distributed in France for the very first time during the project.

The AFSCM is responsible for coordinating this project which involves the City and Urban Community of Nice in addition to many other local and national stakeholders including the city and regional transport operator Veolia Transport.

The first services on offer within the framework of Mobile Contactless Nice will include public transport ticketing and passenger information. Alongside this there will be the promotion of local culture, tourism and heritage, and education through an e-campus project, as well as use in trade and retail for purchases, local bank transactions, mobile loyalty and couponing programmes.

As well as Nice there have been similar pilot experiments in the cities of Caen and Strasbourg, which are planning a wider development of contactless mobile services in their regions. Jean Paul Huchon, President of the Local Council for the Ile-de-France region (Paris region), has expressed the desire to launch a mobile NFC solution in the local transport sector. Finally, the French retail sector – through the Ergosum project which aims at harmonizing the mobile NFC customer point-of-sale experience – is also investigating the development of this technology with a view to offering new customer services and to reducing costs.

Under the scheme in Nice a reference logo will be displayed in all places where the new mobile services can be used, notably in shops and on buses and trams. The ‘ici cityzi’ logo, displayed on a shop window or entrance door, or close to an NFC mobile payment device, means that users can pay using their mobile, and/or use loyalty cards and get practical information by placing their mobile in front of a reader.

A target mark will meanwhile designate the NFC tags inserted within objects, bill boards, etc. It allows customers to recognize instantly where they can access the information points within the city. The user simply places their mobile phone close to the NFC scanner to automatically access to the practical information offered.

An icon visible on the mobile phone menu will then offer a single-click access to the list of cityzi applications installed on the handset.

Those behind the development of mobile contactless services believe they are set to radically simplify daily life in a number of areas: secure purchases, checking or decrementing transportation tickets and passes, paper-free ticketing, account management, access to useful information or local news, interactive dialogue with product and services suppliers thanks to street furniture fitted with NFC tags, and authorizing access to public or private areas. For businesses, these contactless mobile services are expected to expand the quality and added value of their offers, thus generating additional income. Meanwhile, the standardization of the system and the absence of paperwork is set to increase productivity and efficiency.

Both the technology and user uptake and satisfaction with the system are obviously now in the spotlight, but the proponents of the scheme point to successful trials undertaken over recent years into contactless mobile services in Paris, Strasbourg, Caen, Rennes, Grenoble, Bordeaux and Marseille. Though smaller in scale compared to the development in Nice these experiments all confirmed that the technology functioned well and was well received by the general public. An overwhelming majority of testers deemed these services simple to use and providing high added value, say the promoters.

For transport providers, and those promoting a more sustainable approach to mobility management, the prospect is of NFC-enabled mobile phones supporting new types of travel product such as the Passe Navigo or the Vélib’ card. Eventually, the telephone could unite all contactless transport passes for a single user, with consumers receiving a simpler and better all-round service thanks to using a secure mobile internet, with robust connection.

Examples of the uses include: On-line purchasing for transport services and passes to be stored on the mobile phone; scanning the transport ticket by passing the mobile in front of the handset reader; real-time consultation of public transport timetables through the electronic tags placed on bus stops and shelters linked to a mobile site; and more general information on real-time traffic conditions or service interruptions, recommended routes and tourist information, made available in various languages. The system will also provide a clear and detailed record of a customer’s purchase history, although civil liberty and privacy campaigners have raised issues relating to the detailed data on personal activities being recorded and how its integrity should be protected.

For service providers the prospect is of reduced costs, by simplified ticketing and major savings opportunities from streamlined customer handling. They will also be keen to have the information about travel patterns and activities which will allow better understanding of customers and the scope for new service offers. The channel of communication with users will meanwhile facilitate the promotion of new services and special offers. The system should of course also mean a reduction in the quantity of ticket machines and other on vehicle and station equipment needed.

Transport may be at the forefront of a much wider roll out of applications of the NFC mobile phone technology, with the application in France of the European Directive reforming payment services since November 2009 prompting the strong involvement of banks and other consumer services.

Examples of such uses include payment via mobile phone in shopping outlets and in car parks. Payments may either include using the PIN code with the limit set by the issuer, or without PIN for small amounts, if desired by the customer. Other conditions will be identical to those of a bank card, for example in terms of payment limit, but with the addition of easier access to customer-relation programmes and loyalty systems and the ability to manage online accounts.

Customers are able to use NFC-enabled phones at any time to purchase tickets for shows, sporting events, and access to exhibitions and museums, etc. The ticket is then stored on the mobile phone and the customer can then simply scan this against an NFC terminal at the location where the event is taking place to gain entry. Similarly, with a simple scan of an NFC-enabled phone, it is possible to enter or exit a controlled location by moving the phone in front of the NFC terminal. This facilitates access management to private or public locations, such as businesses, car parks, residences, libraries and gyms.

Overall the NFC transactions system is seen by its promoters as providing a simple and secure alternative sales channel, removing the volume of small change handled and the risks and costs of cash handling. Retailers and service providers are also keen to promote new business through the contact that the mobile phone system provides and the opportunity to have highly active customer relationship programmes.

Local authorities are another group looking to benefit from the development of mobile contactless services. As well as supporting the development of sustainable mobility through facilitating access to public transport for occasional users, and the provision of better local and regional information to local residents and visitors, tags could be displayed on street furniture to highlight the transport services, tourist attractions or cultural events close to the user location, and this can be done in a range of languages.

By attaching NFC tags to products, physical communication media, street furniture or points of sale, there is also the prospect of an enhanced interactive dialogue with customers, though the potential intrusiveness of this futuristic world is something which commentators are still debating as an issue for both civil liberty and privacy reasons. For product and service providers they open up the option of alerting customers to potential purchases. By passing NFC-enabled mobile phones close to an indicated area on a display fitted with an NFC tag, for instance, they can be connected to the mobile web site for that brand where products can be identified and potentially purchased.

Moreover, mobile NFC technology opens the door to operating virtual customer relation management programmes. An NFC-enabled mobile phone will be able to store all loyalty cards, bonus points and gifts in customers’ phones, as well as providing a history of purchases which can be consulted at any time. Finally, thanks to mobile NFC, brands will be able to send opt-in customers more suited and personalized promotional offers.