The newest member of the European Union (as of July), the Republic of Croatia is also relatively new to Near Field Communication-based mobile payments, which the nation's transit and mobile companies began publicly testing this year.

Osijek, Croatia’s fourth largest city with just over 100,000 inhabitants, became the country’s first city to begin offering customers the option to use their phones to pay for monthly transit tickets on buses and trams, starting this past April. The service relies on an NFC-enabled SIM card that transit riders can store on phones from Vipnet, part of the Telekom Austria Group and partner of Vodafone.

Vipnet is the largest mobile operator in Croatia and is working with Osijek GPP, the city’s public transit provider on the VIP mPrijevoz service. Consumers simply replace their existing mobile SIM card with the NFC “Butreva” one provided by Vipnet. Users can add funds to their card through their mobile subscriber account.

More recently, Vipnet ported its mobile NFC capability to Croatia’s capital city of Zagreb. As of this summer, the mobile operator’s subscribers there have been able to use an NFC-enabled SIM card to rent public bicycles at Nextbike, a popular municipal bicycle rental service. Vipnet competitor Hrvatski Telekom has also been internally testing mobile NFC for payments in Croatia with about 200 of its employees since last year.

“HT sees a large potential in this type of innovative technology and we plan to continue the expansion of NFC technology so that it would soon become commercially available to all users in Croatia,” said Irena Jolic Simovic, a board member for Hrvatski Telekom, in a release. The pilot phase is slated to end this month. Three major mobile phone operators in neighboring Hungary also united to launch their own NFC payment service on mobile phones this July.

Inspired by the aggressive predictions for mobile payment growth, more developing countries like Croatia—a country of just 4.4 million that has been independent for little more than two decades—are dipping a toe in these waters. Gartner forecasts that 245.2 million people will make a mobile payment this year—a 22 percent increase over 2012. The mobile-paying population will nearly double to 450 million users making mobile payments of $721 billion by 2017, Gartner predicts.

But, it’s arguable how big a role NFC contactless payment technology will play as mobile grows. Of the $235.4 billion in mobile payments being made this year, Gartner says only 2 percent will be made via NFC—growing to only 5 percent of total global mobile payments in 2017.

“Mobile NFC [payment] does seem to be emerging in Eastern Europe” more than other geographies, says David Hodgkinson, senior manager for KPMG in the United Kingdom. However, he questions the technology’s ability to overcome basic business hurdles, including the merchant value proposition.

“Chip and PIN,” he says, “isn’t broken.”

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