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Motorola Inc.'s new payment software for mobile phones, called M-Wallet, will begin commercial rollout within three to six months with wireless carriers, the Schaumburg, Ill.-based technology company tells Digital Transactions News. A test of M-Wallet is already in progress, officials say, though they can't give details. The company is in negotiations with phone companies and has been pleased by the response so far. “We're very close to commercial realization,” says Sarab Sokhey, director of business development for network services at Motorola. “There's a lot of excitement around this.” Motorola, which announced M-Wallet and its back-office processing infrastructure this week to considerable fanfare in the consumer press, also says it is talking to the bank card networks about using M-Wallet in the contactless-payment pilots set for this year that will feature near-field communication (NFC) capability. The first of these pilots launched in January in Atlanta (Digital Transactions News, Dec. 14, 2005) with Nokia 3220 phones and wallet software from ViVOtech Inc. Motorola officials say the company will begin adding NFC chips to at least some of its phones by year's end, enabling devices using M-Wallet to be used at physical points of sale equipped with contactless readers. “NFC is a standard, and we are building [M-Wallet] to the standard,” says Sokhey. Motorola is already testing contactless payments on its phones with employees at its headquarters and that of MasterCard International in Purchase, N.Y., based on MasterCard's PayPass platform. Motorola is pitching M-Wallet primarily as a product for wireless networks to sell to subscribers. It allows users to store credit, debit, and stored-value accounts and features an all-in-one interface to the user's bank for checking-account access and bill-payment capability. Users will be able to transfer funds to other individuals, potentially bypassing more expensive money-transfer networks, and merchants will download electronic coupons to subscribers who opt-in for promotions. The system will also generate and send receipts to the wallet for each transaction. The wallet appears to the user as a screen showing icons representing each account or payment type the user has set up. “What we've done is take the leather wallet, made it a metaphor, and moved it onto the handset,” says Sokhey. M-Wallet is PIN protected and does not store any account data. Part of the service includes a central server, or hub, infrastructure that controls transactions. These hubs link to banks and payment networks for required information and to flow authorization and settlement data. Carriers will use the hubs on a hosted basis from Motorola or buy them outright, Sokhey says. In addition to PIN security, the system will automatically time out sessions that users neglect to close, and all data will be encrypted for transmission. Carrier hubs will be interconnected to accommodate users who move from one phone company to another. Motorola sees a big market for M-Wallet among carriers and wireless-service resellers looking to increase subscriber revenue and cut the costs of functions such as recharging prepaid wireless cards. Users will be able to re-load prepaid accounts by transferring funds from one part of their wallets to the carrier account. Consumers, too, will respond to the notion of getting rid of the need to carry multiple cards, not to mention loads of paper coupons and receipts, Sokhey says. “People are itching to use their phones for this,” he notes. Whether or not phones equipped with M-Wallet ultimately participate in any of the upcoming NFC pilots, common standards will allow the phones to perform contactless payments with any installed readers, Sokhey says. NFC technology, which is being advanced by both banks and wireless carriers, allows phones to communicate automatically with contactless payment readers at merchant outlets as well as with signs, posters, and other media equipped with NFC chips. These so-called smart posters can download Web sites to the phone's browser, allowing users to access both free and priced digital content as well as promotions and other messages. M-Wallet is derived from a product called OneWallet, developed by C-Sam Inc., a small Chicago-based company (Digital Transactions News, Aug. 19, 2005). Motorola is licensing the technology from C-Sam, Sokhey says.
