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Technology / Networks

What do the Euros and Rio Olympics reveal about the future of contactless NFC payments?

With the Olympics currently going at full pelt, football's UEFA European Championship earlier this summer already seems like a distant memory.

For Gemalto, which has been providing technology at both tournaments, it has been an even more action-packed summer.

Both the Euros and the Olympics have provided Gemalto with ample opportunity to test out its new lines of wearable payment bracelets, a technology which the company hopes could have much wider implications.

Lille, which hosted six matches of the Euros including Wales versus Belgium and Germany versus Slovakia, was the first place where the contactless payments technology was tried out.

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In the world’s first commercial roll-out of a contactless transport ticket wristband, Gemalto worked with public transit operator Keolis Lille to provide payments technology to the expected 300,000 extra visitors to Lille.

According to Fred Martinez, Head of Transport and Ticketing, Gemalto, the initiative aimed to encourage people to take public transport.

“These events bring a lot of people,” Martinez says. “We wanted something innovative to encourage people to take public transport.”

Users were able to use Lille's bus, tram and metro services by tapping the limited edition 'Partenaire des Supporters' branded wristband on a contactless reader. This used the Celego contactless wristba?nds, based on Calypso, an international contactless standard for transport ticketing and city services.

Now, in Rio de Janeiro for the Olympics, Gemalto has worked with local ticketing operator RioCard to provide the contactless transport ticket wristbands.

Travellers can use the Celego Contactless wristband and Celego Contactless Sticker. Embedded with a contactless chip from Gemalto and certified by Visa and MasterCard, they enable all of the secure functionalities of traditional contactless EMV cards.

Contactless transit cards were first adopted in Rio de Janeiro in 2003 and are now used by millions of people in the city. 

The key to the technology is the miniaturisation of the component. It is small enough that it can fit within a ring or inside

“The challenge is to reduce it to a very small component while preserving performance,” says Martinez.

Gemalto hopes this technology will have uses beyond big sporting events. According to Martinez, it is in conversations with European transport companies to deploy the technology.

According to research from Juniper, by 2021, two thirds of POS terminals will be contactless by 2021, with the global value of contactless POS set to rise from $321 billion this year to $500 billion in 2017.

Could Rio de Janeiro and Lille provide testing grounds for technologies that could be rolled out in London? In the UK, wearables such as Barclays’s bPay can be used at outlets such as Marks and Spencer and Boots. Showing again the transport connection, it can also be used on Transport for London (TfL) networks.

The contactless payment system was first introduced on London's buses in December 2012. It was then expanded to cover the city’s Tube and rail services in September 2014. Smartphone-based contactless payment technologies such as Apple Pay have also been available from their respective releases in the UK.

According to TfL figures, between April and June £48 million has been spent on buses through contactless and £167 million on rail. Between April 2014 and 2015 the figures were £151 million and £480 million.

If deployed, it would not be a great leap for wearables to help boost contactless spending further.

There are already some examples of this. The Saracens rugby team has been provided with Gemalto smart wristbands, which as well as providing services at the club also facilitate access to London's public transport network with just a tap of the wrist, and can be used at any payment terminal displaying the contactless logo. 

As Martinez explains, “Contactless card is already very convenient. A wearable is a step further. You put your arm on PoS and there is nothing to take out.”

With NFC-enabled smartphones, users could read the credit and reload the wristband without having to go to a ticket machine.

Eventually, these wearables could provide other applications apart from simple payments.

Gemalto has two types of bracelet, one of which simply passively allows applications such as payments.

The more powerful version could however provide other applications. For example, the user could have a mobile coupon that is available on an app on their phone to redeem. Currently to do so they might have to give a code to a cashier or scan their phone. With the wearable they could use NFC to do so.

There are vendors at the other end of the interaction who are in a position to capitalise on these kinds of applications. For example, Verifone launched its Engage platform, which is a POS that is connected to the internet and can be synchronised with other channels as well as the consumer's own mobile device.

It may take some time for the idea of a wearable that can handle your contactless payments to be widely accepted, but when it is the implications could be huge.
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