Citi Tap and Pay, a contactless credit-card payments platform based on Near Field Communications technology, has rolled out in India.

Citi claims that the launch of its Tap and Pay service is one of the world’s largest and most comprehensive pilots ever undertaken and is part of Citi’s ongoing efforts to harness new innovative technologies to provide enhanced convenience, accessibility and mobility for customers. Reinforcing its leadership role in accelerating the adoption of this emerging technology, Citi has established an interoperable mobile payments ecosystem in India in collaboration with Nokia, Vodafone, MasterCard and Vivotech.

“Enabling consumers’ mobile phone to be a payments device by downloading a Citi debit, credit or prepaid account to their phone not only lets them replace plastic cards, it has a top-of-the-wallet effect,” said Mohammad Khan, founder and president of Vivotech, Santa Clara, CA. “We’ve done more than 35 pilots worldwide, and we’ve found that if consumers have an easily accessible NFC-enabled phone, they tend to spend more, so there’s a positive top-of-the-wallet effect for Citi.

“This can compete better than any card sitting in consumers’ wallet, because it’s in the phone, which is always with them,” he said. “Through the mobile coupons and promotion program, Citi can work with retailers and drive more value and traffic to retailer locations, and also drive increased usage of their customers’ accounts.

“In developing countries, most of the population doesn’t have a credit card or bank account, but there are millions of mobile phone users, so it’s a huge opportunity for Citibank to bring the mobile phone to them as a payment device, not only in India, but here in the U.S.”

While this announcement focuses on India, Vivotech has deployed more than 500,000 contactless RFID readers here in the U.S., including integrating point-of-sale terminals with McDonald’s, Office Depot and Home Depot.

The partners participating in the India pilot believe that NFC contactless payments technology has the potential to revolutionize the payment and shopping experience and bring benefits to consumers and the payment, retail and mobile ecosystems.

With the launch of Citi Tap and Pay in India, customers in the city of Bengaluru can use their mobile phone as a credit card.

The technology lets customers tap their mobile phone on a contactless reader at the point of sale to pay for products, eliminating the need for the traditional swiping of credit cards.

The service also does away with the need for customers to send SMS or incur mobile data charges to make these payments.

Early adopters of this technology have access to promotional offers such as discounts at popular merchant establishments, which cover a wide range of categories including department stores, food courts at shopping malls and office buildings, restaurants and fast food chains, bookstores and multiplexes.

Contactless payments moving into the mainstream
Nokia is supporting the service with its NFC-enabled Nokia 6212 classic phones. The 3G phone lets consumers conduct NFC-based interactions with other such everyday devices and services.

Most importantly, NFC-enabled phones can replace the multitude of cards in consumers’ wallets.

Vodafone is the carrier participating in the NFC contactless payments pilot program.

MasterCard will offer its MasterCard PayPass contactless payment and security infrastructure.

Vivotech is providing the underlying technology, including the NFC wallet, the over-the-air (OTA) card-provisioning software, the smart posters and the mobile coupon application, in addition to the contactless readers that participating merchants will use to accept payments.

The RFID-enabled smart posters are branded with the logos of Nokia, Vodafone, MasterCard and Citi, as well as advertisers such as Coca-Cola’s Fanta and local businesses including Nilgiri’s Cream Buns.

The Citi Tap and Pay smart posters issue various calls-to-action, including “Tap into the future right here, right now.”

The smart posters provide consumers with step-by-step instructions explaining how to interact with them: “Tap your Nokia 6212 on this poster for a gift coupon redeemable for 1 free 350 ml bottle of Fanta Apple and 2 Nilgiri’s Cream Buns on a minimum purchase of Rs. 300.

“Tap your phone on the box below, download your coupon and display it to the merchant to get this special offer.

“For further details, visit www.citibank.com/india/tap or SMS CALL to 52484.”

Citi never sleeps on mobile
Citi believes that contactless mobile payment services will be a key lifestyle driver for its highly mobile, international and increasingly urban customer base.

The core NFC strategy is to provide market leading devices for consumers and develop services that add value to the consumer experience and allow the NFC ecosystem to evolve, according to Nokia.

Nokia believes that NFC has the potential to be a disruptive technology, enabling a human way of interaction, transforming everyday tasks, making things easier, more intuitive and more effective.

Nokia’s NFC-enabled devices, such as the Nokia 6212 classic, have the capability to power payment, ticketing and loyalty applications.

Vodafone Essar believes that the mobile phone has become a key personal device and hopes that this pilot will prepare the ecosystem for secure, large-scale, SIM-based sustainable deployment of NFC-enabled payments based on internationally standardized NFC technology, adding more choice for its subscribers.

Citi Tap and Pay customers will use the new NFC-capable Nokia N 6212 classic phone, which they can buy at designated Nokia stores pre-loaded with the Citi Tap and Pay application enabled with MasterCard’s PayPass contactless payments technology.

They will then be able to execute an over-the-air download of their Citibank MasterCard Credit card onto their mobile phone. Once personalized, their credit card on the phone is ready to use.

Customers can use the phones to make Tap and Pay transactions at locations displaying the Citi Tap and Pay and MasterCard PayPass acceptance marks.

Citi claims that Tap and Pay transactions are secure, as they require a PIN validation.

In addition to the built-in security features, the contactless payment transactions will be automatically charged to a customer’s Citibank MasterCard card account through the same payment network that processes traditional credit card transactions.

Through this pilot, Citi has been gathering consumer insight across a wide range of parameters.

In addition to assessing customer acceptance to making contactless transactions through mobile NFC, the pilot will also track the response to NFC-enabled interactive posters and mobile-coupon redemptions.

This is one of many services Citi is testing and rolling out worldwide.

In addition to mobile, Citi is developing and delivering products and services for customers who commute via public transit, manage their money online and are seeking a more convenient retail branch experience.

Once NFC-enabled handsets roll out commercially in the U.S., it will be a boon for marketers and retailers alike. Tactics such as smart posters have the potential to be extremely effective at capturing consumers’ imaginations.

For example, consumers walking in the mall see a smart poster that has an RFID tag offering a promotion of the day or a coupon, so they tap their NFC phone against the poster, which gives information about the location of the poster and about the consumers themselves.

“Once a consumer taps a smart poster, our server will figure out a matching offer based on location and the consumer’s profile to deploy personalized coupon,” Mr. Khan said. “They can walk into a retailer to redeem the discount within the next hour or two, which will drive them into a retailer’s store.

“This enables targeted, personalized couponing programs—instead of mass marketing with coupons, now it can be personalized,” he said. “We could also enable smart posters in store to deploy special promotions or provide information on an opt-in basis.”

Citi speaks
Mobile Commerce Daily’s Dan Butcher interviewed Jeff Semenchuk, executive vice president and head of growth ventures and innovation at Citi, New York. Here is what he had to say:

What is the strategy behind the launch of Citi Tap and Pay?
Citi’s Innovation team is testing and rolling out projects around the world that focus on customers’ needs now and in the future. Through the Citi Tap and Pay pilot, we’re gathering user insight across a wide range of parameters, and we’ll use that insight to enhance and refine our future offerings.

We’re assessing customer acceptance to making contactless transactions through mobile NFC, and we’re tracking the response to NFC-enabled interactive posters and mobile coupon redemptions.

Other projects that our Innovation team is working on involve banking solutions for customers who commute via public transit, customers who manage their money online and people who are seeking a more convenient retail branch experience. These projects are creating new value for our clients and new sources of revenue streams.

Are there plans to roll Tap and Pay out to other markets?
It’s a bit too early to talk about our contactless mobile payment plans for other markets.

What is the current state of contactless mobile payments, and what is its potential?
A large portion of our customer base is highly mobile, international and increasingly urban. We believe contactless mobile payment services will be a key lifestyle driver for them. It may take a while to catch on — like ATMs — but based on our extensive customer research, we think it’s inevitable.