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Versatile mobile to replace credit cards

Mobile payment offers customers an alternative to card payment

International IT company GFT Technologies AG (GFT) is developing future-orientated solutions for online payments. As payment with a mobile phone is increasingly becoming an alternative to the classic credit or debit cards, bank customers now have a wide range of payment options from which to choose. "The mobile phone is the credit card of the future," says GFT CEO, Ulrich Dietz. There has been a distinct rise in the use of mobile phones to make payments and take money out at cash machines, as well as to carry out banking transactions.

"In order to offer the customer a high level of operational reliability and flexibility, we are forging ahead with our innovations in this area," explains Ulrich Dietz, CEO of GFT Technologies AG. "For mobile customers, it's crucial to have multiple options for cashless payments."

With its Mobile Banking Competence Centre (founded in 2009), GFT is now taking a leading role in the development of IT applications for online banking on your mobile phone (mobile banking) and applications for making payments and taking out cash with mobile terminals (mobile payment). "Everyone now has a mobile phone, which makes it a logical alternative to using debit and credit cards," says Ulrich Dietz. According to Dietz, the options that mobile phones now have for handling bank transactions must be expanded to include a mobile payment procedure and numerous further applications will be developed in this area in the next few years.

With mobile payment, the focus is primarily on contactless payment. Bank customer cards are integrated into the phone, which uses radio transmission over short distances (Near Field Communication - NFC). As an additional card is no longer needed, a smart phone can communicate directly with an automatic paying machine at the payment office.

Another European solution for cardless transactions is Hal-Cash. A transaction number is sent to the customer's mobile phone by SMS and can be used to take out cash at ATMs. This system has been in use in Spain since 2006 and is currently offered by ten banks at 12,000 cash machines. A further twelve banks in Europe and South America are looking to introduce the system in the first quarter of 2010; trials are currently being carried out in 40 more banks in 25 countries. The advantage is that bank customers can take out cash quickly and easily without having to use a debit or credit card – particularly useful in emergencies or when travelling. The customer benefits from ease of use and flexibility, while the financial institution benefits from lower costs in comparison to card usage. If necessary, any possible errors can be eliminated quickly and cost-effectively with a software update. Furthermore, identity management on the mobile phone offers increased data protection.

In recent years, faulty card chips have meant that around 30 million debit or credit cards could no longer be used. In such cases, mobile payments could have been the solution: If your debit or credit card doesn't work, your mobile phone can be used to make payments or take out money.