Etisalat, the UAE’s largest telecoms firm, plans to launch a mobile payment system by the year end, the operator said Tuesday.
The system, which will initially be available on BlackBerry Bold 9900 devices but will later include all phones with near field communication (NFC) technology, allows users to pay for purchases of up to $50 by swiping their mobile phone at MasterCard purchase points.
Users will be able to top up their “virtual wallet” and shop at around 600 points of sale across the UAE. Costa Coffee, Burger King and Reel Cinemas have so far signed up to the service, said MasterCard.
The card service provider said it planned to double the number of purchase points in the Gulf state to 1,200 in the next six months.
Etisalat said it plans to launch the technology in stages and eventually hopes to link customer’s smartphones with their credit cards.
“What we are launching now is a prepaid MasterCard so you have got to top it up [but] in the future you will have your credit card, which doesn’t need to be topped up.,” Enrique Beza, senior manager of m-commerce, Etisalat UAE, told journalists at the launch.
“Prepaid cards will be the first launch and credit cards and debts card will be the second [phase].”
All Etisalat NFC devices will come preloaded with a NFC enabled sim card while existing customers will be able to update their card in store.
The operator said it is currently in talks with Dubai’s Road and Transport Authority to roll out the technology to include the Dubai Metro and said it could also be used to download music, content and redeem loyalty points.
“The possibilities around NFC are not just around payment. Payment is, of course, a very important application but with smart tags you can build a story. You could have coupons…. redeem points with your next coffee or get a coffee free,” said Beza.
The rise of mobile payments has been hailed as a revolution for consumers amid a saturated market for credit and debit card providers.
Rival payment firm VISA in June acquired South Africa’s Fundamo in a deal valued at $110m, in a bid to develop mobile payment services in lucrative development markets.
MasterCard purchased the Ireland-based Orbiscom, a payments solutions provider, for around $100m in 2009.
Smartphone penetration in the UAE currently stands at 15 percent but is expected to increase 11 percent per year for the next year years, driven in part by the Gulf state’s growing population, according to the memory products vendor, SanDisk.
“We see a few markets that are particularly conducive to introduce of this type of technology and….MasterCard’s view is that this one of those places where there would be good adoption,” said Philip Yen, group head, emerging payments for Asia/Pacific, Middle East and Africa at MasterCard.
“Initially [this will be] for the Middle East and Africa but we believe it could be a showcase beyond even this region for the rest of the world as well,” he added.
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