When they're not busy cheering their countrymen on over the next few weeks, fans attending the 2012 London Olympics will have the opportunity to try out contactless payment systems. Longtime United States Olympic team sponsor Visa, along with mobile phone maker Samsung debuted a mobile payments application earlier this year, one that will allow Olympic visitors to use their phones at the point of sale during the upcoming games.
More than 3,000 contactless terminals, installed at both Olympic and Paralympic venues in London, will showcase contactless payments and other technologies.
Based on Visa's payWave technology, the collaboration between the two industry giants culminated with a demonstration at the Mobile World Congress in Barcelona, Spain. With the launch of the app, Visa and Samsung are confident that more users are likely to make purchases using a mobile device.
Introduced in 2007, payWave uses radio frequency identification (RFID) technology, allowing consumers to pay by waving their credit card next to a contactless payment terminal rather than swiping the magnetic stripe or inserting the card into a POS terminal. Here's a little bit about how these mobile payment cards work.
Contactless Payment Cards
Each credit card contains an embedded chip and antenna designed to communicate with the contactless card reader at the point-of-sale. Depending on the transaction amount, customers may be required to enter a Personal Identification Number (PIN) as an added security measure.
For Visa, the threshold has generally been around the $25 mark. Visa and Samsung anticipate that during the Olympic Games, transactions over $24 will require a PIN.
Already adopted more readily in the UK than the US, the mobile payment system requires significant infrastructure changes for both consumers and credit card providers. That means only customers using a supported smart phone handset will have access to the service, limiting the pool of new adopters.
Consumers report satisfaction with the speed of the transactions, some claiming that the retail operation takes half the time of a traditional credit or debit card or a cash purchase. And statistics from some of these credit card companies indicate that consumers spend more on each transaction when using this mobile payment strategy.
For Visa, the London Olympics present a global opportunity to gauge the interest level of consumers in using contactless payment systems, and engage these customers on a one-to-one level. It's difficult to estimate how many people will use the technology, but the Games present a unique opportunity to field test an approaching technology.
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