Contactless mobile payments – how to pay by phone?

Phone wallet – how is it possible?

Phone wallet - how is it possible?

Today’s world is very automated and modernized. Shopping on the internet? Borrowing online? Making payments by phone? Just a few years ago it would sound unbelievable, today I don’t think anyone is surprised. Our phones currently have all the services: navigation, alarm clock, stopwatch, calculator, camera, camera, calendar, music player – smartphones now have unlimited possibilities. Indeed – all this arsenal lacked only an electronic wallet, with which we can do shopping wherever we want. All we have to do is pick up the phone, put it on the terminal and we have already completed the transaction. There are currently two technologies on the FinTech market – NFC and HCE. However, these are not the only innovative solutions that are conquering the financial industry by storm – the introduction of e-receipts is expected for 2018.

What is NFC payment?

What is NFC payment?

How does NFC (Near Field Communication) work? Same as PayPass. Our payment card is personalized. When we make contactless payments, the card sends the bank information when and where we make the purchase. The bank receives the service provider’s data and thus knows which account he should transfer the money to. It works similarly on the phone. The traditional card is replaced by a SIM card. What we call the payment card chip has been moved to the area of ​​the SIM card, where it works in the same way as the plastic card on the microprocessor. Of course, for everything to work properly, the SIM card alone is not enough.

Technical side of NFC mobile contactless payments

Technical side of NFC mobile contactless payments

In order for everything to be put together, we need a phone that is not unfamiliar with modern technology, a SIM card that is integrated with it, and an application that will support the entire process. The operator who will launch the mobile wallet service for us is also extremely important. As you can see, there are several technical steps to overcome, but these are not unmanageable things. Experienced smartphone users will certainly cope with this upgrade as well. The only obstacle may be the mobile network, because in Poland only two – T-Mobile and Orange – offer the possibility of paying by phone. The rest are just implementing this solution. They offer as many as 20 phone models that enable the application to work efficiently.

HCE technology – the most modern payment method

HCE technology - the most modern payment method

HCE payment is the same as for NFC technology. They are divided only by two, though fundamental, differences. In the case of HCE, we do not need to replace the old SIM card with the one that supports mobile payments, which is certainly a big help. At HCE we are not limited by the operator, which is losing importance here – the most important is the bank where we have an account. If we are customers of SV SCX, Ecu Bank, Puttin Bank, PB or Seklao, we are entitled to use this extremely developmental fintech solution. However, customers of other financial institutions do not have to worry because they are also slowly implementing such innovations. Each bank has an application that allows mobile payments, and some of them have free bank accounts in their offer.

HCE applications easy to use

HCE applications easy to use

There are several HCE applications that allow mobile payments. Which one we choose depends on our operating system and the bank in which we have an account. Each application, however, is very easy and intuitive to navigate and, most importantly, free. PeoPay is a Pekao application that does not connect to mobile banking. This is a bit of a difficulty, but logging in to PeoPay is much easier, because you won’t encounter a masked password here. To pay, you need to unlock the phone screen, bring it closer to the terminal and it’s ready. For payments over PLN 50, we will be asked to enter the PIN. The whole process can be done even when the phone is out of range of the Internet.

Other mobile applications

Other mobile applications that are definitely worth mentioning are SV SCX and IKO of the Pancor Bank. Both banks have decided to integrate the payment function with mobile banking. While in SV SCX we only need an application, PB slightly more complicated the process. To be able to use HTC technology at PKO, you must have a plastic card issued by the bank, which will be useful if the terminal has no built-in contactless payment option. What if we are clients of different banks? Of course, we don’t need to have separate applications – all we have to do is install Android Pay. In this application we can combine the debit and credit cards of many banks and pay for our purchases with the selected one. Currently, SV SCX, Alior and Nest Bank cooperate with Android Pay.

Where will we pay with a smartphone?

Where will we pay with a smartphone?

With the possibility of making mobile contactless payments is just like with PayPass. We use the terminal for this and if it has the option of contactless payments, it makes no difference whether the payment will be made by a traditional plastic card or by phone. For those of us who travel often, we also have good news – there are no territorial restrictions on paying by phone, so wherever we are in the world, we can pay by phone anywhere.

To sum up, we will pay by phone in a shopping mall, restaurant, cinema or supermarket – wherever we have been paying with a traditional card until today.