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Chunghwa Telecom launches mobile payment system trial

TAIPEI--Chunghwa Telecom Co., Taiwan's largest telecom operator, launched a trial project Monday that will enable smartphone users to pay for certain services simply by waving their phone at a sensor at the point of sale.

Some 500 to 600 subscribers to Chunghwa Telecom's mobile services are expected to join the first phase of the trial project, which will last for six months, Chunghwa Telecom said.

The project's participants will need to install a customized SIM card in their smartphones to be able to use the new mobile payment service, which relies on near-field communications (NFC) technology.

The technology will enable them to make contactless payments at Taipei's MRT and at local retail stores equipped with electronic wallet services, the carrier said.

Certain financial functions of the NFC-enabled phones, such as credit card payments and wireless recharging for pre-paid cards, might need to wait until early next year, when Taiwan's financial regulator is expected to approve the new functions, the company said.

“Many high-end smartphones available in the market have built-in NFC technology. We expect 2013 to be a boom year for NFC-related services,” Chunghwa Telecom President Lee Yen-sung said at press conference announcing the project's launch.

Although Chunghwa Telecom is expected to purchase fewer than 1 million NFC enabled smartphones in 2013, the company will likely buy more than 10 models in the category, Lee said.

Chunghwa Telecom is partnering with three handset makers — Taiwan's HTC Corp., South Korea's Samsung Electronics Co. and Japan's Sony Mobile — to introduce NFC phones.

Jack Tong, president of HTC North Asia, told CNA at the news conference that regulatory approval from Taiwan's Financial.

Supervisory Commission will be the key factor in driving NFC services in Taiwan, since the technology and the overall ecosystem already exist.

HTC is expected to introduce more NFC-ready smartphones in Taiwan in cooperation with Chunghwa Telecom, said Tong, who saw great potential for growth in Taiwan's NFC service market.

In June this year, HTC announced a partnership with Cathay United Bank and two card issuers, EasyCard Corp. and MasterCard International, to launch a co-branded card operating on the same principle.

It was the first time that Taiwanese companies integrated the functions of a credit card and an EasyCard into a micro-sized memory card.

The integrated card enables contactless payments in 12,000 local stores through the EasyCard function and in 350,000 shops worldwide with MasterCard's PayPass electronic wallet service when it is inserted into the HTC Incredible E NFC smartphone.

Worldwide shipments of NFC-enabled phones will grow to 80 million units this year from 35 million units in 2011, representing a year-on-year increase of 128 percent, according to British market research firm IMS Research.

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Holding a smartphone in hand, a showgirl demonstrates the near-field communications (NFC) technology beside the Mass Rapid Transit payment sensor at a press conference, yesterday. ...

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