RBI launches m-payment in Austria

Thursday 2 February 2012 | 11:55 CET | Background

The Austrian bank Raiffeisen Bank International AG (RBI) will launch a contactless payment solution in April 2012, both for debit cards and for smartphones. Their CardMobile solution enables NFC payment from an iPhone app, combined with a low value stored account, provided by Cardis International, a payment technology provider based in Toronto, Canada and Amsterdam, Netherlands.

RBI operates the number three bank in Austria and is also active in seventeen countries in Central and Eastern Europe. RBI claims to be the first Austrian bank to launch an NFC solution, called CardMobile. The roll-out of this project is planned for the second quarter of 2012 and will take place in a major city in Austria. The bank will issue dual mode debit cards.

RBI’s strategic partners for CardMobile are Visa Europe, V PAY, Visa Europe’s chip-only debit card and Cardis International, which provides a low value-payment solution. The NFC payment solution is based on V Pay, the EMV compliant solution from Visa Europe.

The NFC hardware comes in the shape of DeviceFidelity’s iCaisse solution for iPhone. This smartphone case contains the NFC stack and antenna, with the secure element on a micro SD card. It connects to the standard Apple dock port. DeviceFidelity markets the solution as In2Pay. Support for other makes and models will be introduced at a later stage.

Cardis International has developed a stored value account for low-value transactions which are still typically handled by cash. The account can be topped up in a single load transaction using existing payment infrastructure, or automatically over the air. Cardis then aggregates payments for merchants, reducing transaction costs.

A spokesman for Cardis explains that their payment module is integrated into existing payment networks. Other electronic wallets, such as Chipknip in the Netherlands and Proton in Belgium, can be seen as separate payment methods that require a new dedicated infrastructure, making them a somewhat different proposition to merchants.

Cardis aggregates small payments on the ‘highest possible level’, which means that merchants are paid at the end of the day for all transactions at once. Consumers top up their wallet with a larger amount, typically EUR 50. The company says it’s working on several implementations in different countries. In a not specified Eastern European country, a card-based solution is underway; while a cooperation with mobile operators and handset OEM’s is underway in South-East Asia. 

As usual with roll-outs, the main question is how to gain a beachhead. A broad acceptance is necessary to reach economies of scale. It will be some time before mobile payment will really make an impression on the number of cash transactions. Until then, it’s yet another payment method.

On the other hand, the fact that Raiffeisen Bank will issue dual mode cards can help to build the business case for NFC-capable terminals. Furthermore, Austria can be regarded as an advanced mobile market, with a high smartphone penetration. Raiffeisen offers online banking, and mobile banking for iPhone, and selected handsets running on Android, Windows Phone, Bada and Symbian. The other main Austrian retail banks offer online banking and mobile banking, for iPhone and other operating systems. 

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