Watch and Learn US; the UK Shows Mobile Payments Done Right

While the U.S. is still doing lots of talking about using smartphones for wireless mobile payments in lieu of credit cards, the U.K. continues to put plans into action. Network operator Orange UK is rolling out a national mobile payment service called QuickTap, allowing consumers to use their handsets to pay for transactions at 50,000 retail locations. According to the Mobile Business Briefing site, Samsung’s Tocco Lite handset with an NFC-enabled SIM card is the first of many smartphones to work with QuickTap.

Perhaps the U.S. should look to the QuickTap initiative to learn how to speed-up adoption of payments by way of NFC (also known as near-field communications). Orange UK partnered with both Barclaycard and Master Card for the new program, and each consumer participant gets a free £10 ($ 16.20 USD) deposit from Barclaycard to begin using the system. Consumers can later load up to £100 on their handset, and as an incentive, all purchases using QuickTap earn a 10-percent cash back reward in the first three months of the program. Purchases are limited to £15 per transaction under the program, although I’d expect the program to raise that limit in the future as adoption increases.

Between the consumer incentives and widespread retail support, the U.S. can learn from the Orange UK QuickTap initiative. Wireless payment terminals are already in a number of locations here. I use them at convenience stores, McDonald’s, and other venues. The NFC chip that enables my transactions is integrated in my credit card, but there’s no reason that small wireless chip can’t be in a handset or SIM card instead. Google’s Nexus S phone already has an NFC chip, for instance.

But we’re still trying to figure out if the NFC functionality should be in the phone, on the SIM card or on a microSD card. And because mobile payments are expected to generate more than $ 633 billion in transactions by 2014, network operators, payment processors and banks are all fighting for a piece of the pie.

What all the participants are failing to realize is that even after a solution becomes viable, it’s going to take even longer for consumers to adopt the technology. Incentives for wireless mobile payments are sure to help, but the first step is implementing a functional wireless payment system to begin with.

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