Spanish bank La Caixa is going to issue contactless TAP Visa stickers to customers in Barcelona this month, with 5,000 participants taking part in the first stage of the project. The bank expects 200,000 stickers to be in use by the time the city hosts the Mobile World Congress in February.
The NFC-compatible “TAP Visa” stickers attach to the back of mobile devices, carrying an EMV chip holding encrypted card data. Users will be able to make contactless payments at more than 50,000 retailers equipped with contactless terminals across Spain.
The project is significant because it sidesteps two common issues with mobile NFC: that not all phones are NFC-enabled yet; and that the bank does not have to rent space on a secure element controlled by a device manufacturer or a mobile network.
However, the use of stickers does introduce limitations as well, such as not being able to provision or manage the “card” over the air, or communicate directly with the user via the phone’s screen and keyboard.
The bank’s announcement of the roll-out emphasizes consumer security, pointing out that the system has the same security features and encryption as a chip card. Besides, according to La Caixa, the bank’s CaixaProtect guarantee also applies to TAP payments, “thus offering protection against fraudulent operations beyond the user’s control.”
For transactions of more than €20 (US$26), customers will need to use a PIN and will also get a text message confirming each transaction.
The bank has also developed a mobile app for iOS, Android and Blackberry phones which allows customers to view and manage transactions.
In January 2012, the bank launched its contactless payments offering and announced plans to convert 17,000 points-of-sale and 500 ATMs in Barcelona to accept contactless transactions. La Caixa reports that it has processed more than one million contactless payments in the city since then, and the number of transactions under €20 using contactless has grown 15%.
In summer 2010, La Caixa partnered with Telefonica, Gemalto, Giesecke&Devrient, Samsung, Ingenico and the local city council to run an NFC pilot in the resort town of Sitges. Analysis of usage patterns found that consumers conducted 30% more transactions, with a 23% increase in the average purchase value, than with plastic cards. 60% of transactions were valued at €20 or less.