A near-field communication (NFC) trial designed to showcase the mobile phone as a payment device, is underway in Taiwan.
In a statement Wednesday, Taiwan Mobile announced the pilot project conducted in partnership with MasterCard and Taiper Fubon bank.
Taiwan Mobile has issued 100 customers with Nokia 3220 mobile phones, each embedded with NFC technology--which uses radio frequency identification (RFID) to enable secure, contactless communication between two devices--and MasterCard's PayPass payment facility.
NFC technology has already been deployed in MasterCard PayPass contactless credit cards and payment devices throughout Taiwan, including at retail outlets, highway rest stops and transport systems across the island.
As part of the pilot, participants can use their PayPass-equipped phone at any one of the 46,000 PayPass enabled merchants worldwide, in addition to the 2,000 approved merchants around the island.
Participants simply need to hold their phone near an NFC card reader to make a purchase. Payment is immediately deducted from the subscriber's credit card account. Each customer is given a maximum purchase transaction of NT$3,000 (US$90), with a monthly limit of up to NT$15,000 (US$455).
In addition to contactless payment, Taiwan Mobile revealed that it will also be using the technology to allow participants to download merchant incentive programs onto their NFC-enabled phones simply by tapping on various smart posters located throughout the region as well as selected retailer storefronts. The incentives are stored as "e-coupons" that customers can later use to check promotion details or redeem for items.
Taiwan Mobile's pilot is the latest in a series of global NFC-based initiatives to utilize MasterCard's PayPass contactless payment platform.
Last year, US-based wireless carrier Cingular conducted a similar test run, teaming with cell phone maker Nokia, and financial institutions Citigroup and MasterCard Worldwide to trial NFC phones equipped with PayPass facility.
MasterCard, however, is not the only credit card maker with ambitions of using the mobile phone and NFC for cashless transactions.
In January, rival Visa launched a mobile platform that it claimed will assist in the commercial deployment of contactless mobile payments and NFC services around the world.
According to research house IDC, by 2010, 2 percent of the global mobile phone shipment will consist of NFC-enabled models.
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