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Plzeň to launch mobile phone payments

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Starting in April, paying for public transport fare will become easier for some citizens in Plzeň. It will only require passengers to swipe their mobile phones past an electronic reader on buses and trams.

It will be the first such system in the Czech Republic. Passengers in Prague can now buy a ticket via mobile phone, but the system in Plzeň will not require sending a text message; it will charge passengers money directly from their bank accounts.

The system works so far only with two types of Nokia mobile phones able to communicate with the payment readers with a reading distance of several centimetres. The users will have to install a special “payment” program into their mobile phones that will enable them to make payments through a bank account created for this purpose.

“The electronic reader on the bus will immediately print out a confirmation of the payment,” said Zbyněk Proška of the Plzeň public transport company.

The mobile phone payment system for Plzeň was developed by Telefónica O2 and the company NXP Semiconductors. The transit company will launch a pilot programme in April with selected customers, who have already bought the city’s electronic card. All citizens should be able to use the service by the end of the year; Telefónica will then offer the system elsewhere.

The citizens of Plzeň will soon be able to pay via mobile phones in public swimming pools, the zoo, a salt cave, a library and other places where the Plzeň electronic payment card has already been introduced.

Recharging a mobile phone will be possible at customers’ offices of the public transit company and later even via a regular bank transfer.

The citizens of Plzeň have been able to use public transport without coins and notes as of 2005 thanks to the Plzeňská karta project. The card will also enable card holders to get various discounts and to buy theatre tickets.

Once the project has gone through the testing phase, mobile phones will become an alternative to the Plzeňská karta plastic card. “The pilot project will last about nine months,” says Proška.

The system, presented last week at the European mobile technologies trade fair in Barcelona, doesn’t yet see major development progress due to small support from mobile phone producers. However, the Japanese copmany Toshiba is currently working to integrate the system with SIM cards, which should enable users of all recently developed mobile phones to use their phones for payments.

The system uses various levels of security. “Legislation allows customers to have only up to the equivalent of EUR 150 on one account,” said Proška. If the owner loses the phone or the phone is stolen, he will lose a little over CZK 4,000 and not more.

Experience from abroad

While customers in Japan can use their mobile phones to pay for petrol, paying for mineral water in a vending machine or for parking is still a matter of testing in Europe.

For example, Germany’s railway operator Deutsche Bahn together with mobile operators, are testing the system Touch&Travel. The system will enable passengers to pay the lowest price for a ticket, depending on the number of transfers and the duration of their trip. The VISA company in Switzerland is testing the system payWave for contactless payments up to EUR 25. Pilot projects for this method have also run in Great Britain, France and Spain.

What about other cities?

A mobile phone using NFC technology will not be suitable only for making payments.

The carmaker Nissan and electronics producer Sharp want to adjust mobile phones to replace car keys.

Last year, Prague introduced the Opencard, a smart card that can be used as a public transportation pass, a library pass and that allows holders to pay for parking in Prague 1. “An electronic wallet for purchasing fare could be introduced in the second half of 2009,” said Martin Opatrný, spokesman for the Opencard project. But he does not say much when it comes to mobile phone payments: “It is technically possible to integrate the systems of individual towns. We’d like to integrate the Opencard with the transport system in Central Bohemia.”

It may take a while before the system starts working across the whole country. To make the system work, operators, phone producers and banks must first reach an agreement. “The pilot project in Plzeň will provide us with information about the needs of our clients and business partners,” said David Brendl of Telefónica ČR, adding, “We are expecting to have this ready by the end of 2009.”

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