La Caixa Again Spearheads a Broad Emerging Payments Project
La Caixa Bank says it will soon launch the largest mobile payment venture in Europe, once again placing the bank at the center of a major European payments initiative.
La Caixa is planning to launch a Near Field Communication-based mobile wallet with Visa Europe and Spain's leading telecommunication companies in February after initial tests next month.
Telefonica, Vodafone and Orange will join the project in what La Caixa calls the first time a European bank will launch a system supported through the market's leading telcos. The mobile wallet initially targets the Spanish market, with plans for further European expansion to follow.
Such an ambitious approach is familiar territory for La Caixa, which put in motion a plan with Visa Europe in January of 2012 to make Barcelona the first city in Europe in which contactless payments represent the dominant transaction form for consumers and merchants.
La Caixa's latest initiative is a "natural extension" of all of its previous projects and efforts, says Zil Bareisis, a London-based senior analyst for research firm Celent.
"It builds on the acceptance infrastructure deployed as a result of those previous initiatives," Bareisis says. "Combining that with the deal with the three largest operators in the country means that the service should be widely available from early days."
Still, like most mobile payment initiatives, some consumers may not be ready for the technology, Bareisis adds.
"It will still require NFC capable handsets as well as NFC SIM cards, so quite a few customers will probably have to upgrade in order to make use of the service," Bareisis says.
Together, the three telcos involved serve more than 80% of the Spanish mobile phone market, La Caixa says.
The new mobile NFC payment service will allow LaCaixa customers to use their mobile devices to store their encrypted payment cards and make purchases at merchants and retailers without having to attach stickers or any other accessories to their handsets, the bank says. All card types can be stored on the SIM, the bank adds.
That SIM card data is transferred from the mobile device to an in-store point of sale terminal using the phone's NFC antenna.
Consumers can initiate mobile payments at any retailer that accepts contactless payments. Currently, more than 300,000 contactless-enabled point of sale terminals operate in Spain, the bank says.
The bank has established online mobile payment service contracts for consumers to register and obtain the mobile wallet app to create virtual cards on their phones.
Every time a user requests a card for a mobile device, the system will check that the hardware is NFC-enabled and has the needed SIM card, the bank says.
"This week's game-changing announcement is yet another example of how Visa Europe has gathered together a range of market players to offer an exciting new service to Spanish consumers one that we expect to see expanded further in Spain and to other European markets in due course," Nicholas Huss, CEO of Visa Europe, states in a Dec. 18 press release. Visa Europe declined to provide an interview for this story and La Caixa did not respond by deadline.
In addition to the mobile initiative, La Caixa says it has issued more than 3 million contactless cards in Spain to date.
As with any mobile payment initiative, it will take more than being able to make a payment through a tap of the phone to lure consumers, Bareisis says.
"It's not a habit-changing proposition unless it delivers more for the customer in terms of rewards, offers, advanced analytics and other capabilities," Bareisis says. "It will be interesting to see which of those additional services the partners are going to roll out and how."