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Austria's A1 pilots paybox NFC® payment solution with McDonald’s and Merkur

Austria's A1 pilots paybox NFC® payment solution with McDonald’s and Merkur

Posted by Jeremy CowanApril 24, 2012

Vienna, Austria — Telekom Austria Group’s domestic subsidiary A1 has launched a pilot scheme with McDonald’s and Merkur, an Austrian supermarket chain, which allows customers to make cashless, PIN-less payments of up to EUR 25 with a single hand movement.

The Near Field Communication (NFC) pilot scheme will operate until this summer, and will see the service provided in selected Merkur branches and McDonald’s restaurants across Austria. A total of 500 test users will make their payments using the new NFC service, with cashless payment being accepted by 38 cash registers in five Merkur branches and 19 cash registers in four McDonald’s restaurants.

Andreas Schmidlechner, director of Marketing & Communications at McDonald’s Austria, says: “At McDonald’s, we are constantly working to optimise the dining experience of our customers. In line with our motto ‘good fast food’, convenience and fast service play a crucial role. With the help of digital service concepts we can further improve our ordering and payment processes and make them simpler and more practical. NFC opens up a wide range of new possibilities to speed up payment transactions so that customers can spend more time enjoying their meal in the restaurant or can order their takeaway food more quickly and easily. We will start a pilot project together with our strong partner A1 as the first service provider in the Austrian restaurant industry to test this new mobile payment solution with selected customers in four restaurant locations in Vienna – three on the Mariahilfer Straße and one in the railway station Westbahnhof – demonstrating once again our pioneering role in the area of innovative service concepts.”

NFC technology enables secure wireless data transmission over short distances and supports the integration of smart card services into mobile phones. The payment module is embedded in a high security chip directly in the SIM (subscriber identity module) card. When using old mobile phones that are not NFC-enabled, this payment module can be installed into the high security chip of an NFC sticker, which can be attached to the mobile phone or to the inside of the battery case depending on the device used. To make a payment, customers simply wave their NFC-enabled mobile phones or stickers over the terminal. The transaction can be completed in less than half a second and is signalled by a tone sounding when it is successful.

“NFC is now the talk of the mobile industry and is increasingly gathering momentum, especially at the international level. Last autumn, the GSMA elaborated a uniform standard jointly with the leading mobile operators of the industry, which enables the highest possible degree of compatibility across any device and any network operator, with the SIM card providing a high security identification function,” says Hannes Ametsreiter (pictured), CEO A1 and Telekom Austria Group.

paybox NFC® is said to be customer friendly due to its simple, quick and secure operability and high transparency. Upon completion of the payment transaction, customers receive a text message confirming the amount charged to their mobile phone bill, regardless of the end-device used for the payment, be it an NFC-enabled mobile phone or an NFC sticker. paybox NFC® and the mobile phone number are coupled together. A paybox App provides an additional overview of all payment transactions carried out by the customer, which can be viewed anytime at

Alexander Sperl, CCO at A1, adds: “We were the first mobile operator worldwide to launch NFC services in 2007 and now we are taking the next big step by launching this simple and high security NFC payment solution. We can build upon many years of experience in the development and implementation of e-commerce and m-payment services as well as on our extensive know-how and development expertise for mobile NFC solutions. Together with the paybox Bank, we are starting into the future of mobile payments, playing once again a prominent international pioneering role.”

Bernd Hartweger, CEO of paybox Bank continues: “Cash is still the most popular means of payment especially for amounts of up to EUR 25. Searching for small change or waiting to be given money back is time consuming. With paybox NFC, we can offer our customers a state-of-the-art alternative. A major focus when developing paybox NFC® was on guaranteeing a high security solution in addition to providing a quick and simple service. Mobile payment will therefore become an integral part of our everyday life going forward.”

paybox NFC® is a co-operation project between A1 and paybox Bank. paybox Bank AG is owned by A1 Telekom Austria AG and currently claims approximately 1 billion active customers. The company holds a comprehensive Austrian banking license and has specialised in providing financial services and m-payment solutions in co-operation with Austrian mobile operators. In addition to payment services, for instance in connection with m-parking and m-ticketing, paybox Bank is the issuer of the A1 VISA card. Thus, with paybox Bank, A1 has an experienced business partner with proven knowledge of mobile payment transactions.

Payment transactions are carried out in accordance with Austrian banking law and banking standards, exclusively via authorised paybox NFC® terminals. Encryption guarantees secure data transmission. No sensitive data (such as the bank account or mobile phone number) are included in the payment information, in the NFC chip or the NFC sticker. The ‘outreach’ of the NFC-enabled device amounts to a maximum of 5cm to avoid unintentional payments. Contactless payment systems require special security standards: features such as handshaking between the terminal and the secure chip in an NFC-enabled smartphone or sticker, a transaction limit of EUR 50, data administration pursuant to the highest international security standards and temporary service suspension if the mobile phone is lost or stolen, all guarantee a higher degree of security for mobile payments with paybox NFC® than conventional cash payments. paybox NFC® works with any Austrian bank account.

In order to use paybox NFC®, customers need a smartphone that supports the secure A1 NFC SIM card. A1 currently offers five smartphone models in its portfolio: HTC One X, Sony Xperia S, BlackBerry Curve 9360 and 9380, as well as BlackBerry Bold 9900. “According to current estimates, NFC-enabled mobile phones will amount to 200,000 in Austria by year-end 2012,” believes Alexander Sperl.

Once the pilot phase has been finished, it is expected that the new NFC service will be expanded to additional points of sale, business partners and payment services.

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