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Dortmunder Volksbank Introduces Payment with Cellphones

Customers of Dortmunder Volksbank will now be able to use a virtual credit card integrated in their smartphones to make payments in shops that accept MasterCard PayPass thanks to a TSM (Trusted Service Manager) service operated by technology group Giesecke & Devrient in cooperation with DG VERLAG. As a systems integrator and partner of cooperative banks as well as other institutions, DG VERLAG uses the TSM service to install and personalize the ClassicCard Mobile credit card on customers’ smartphones via a secure wireless connection, storing the card in a secure element on the SIM card. This represents the next innovative step in mobile payments for DG VERLAG, following on from the dual interface credit card and the paySticker.

Customers will now make payments using the credit card integrated in their smartphones and located in the digital O2Wallet. All they need to do is hold the device up to the payment terminal, which makes payments particularly quick and convenient. For payments of more than 25 euros, customers must also enter a PIN code to authorize the transaction. The ClassicCard Mobile integrated in their smartphones allows customers to make payments just as securely as with other chip-based credit cards. Acceptance of this product among Dortmunder Volksbank’s customers will be monitored closely to help DG VERLAG decide whether to roll it out to other cooperative banks. The new credit card product is issued by WGZ Bank, which is supervising its introduction by Dortmunder Volksbank.

To use the smartphone credit card, customers must have the digital O2Wallet and be using either the Samsung Galaxy S3 or Samsung Galaxy Ace 2 NFC-enabled smartphone. They will also need an O2mobile contract and related NFC SIM card. Once customers have submitted their application for the virtual ClassicCard Mobile credit card to Dortmunder Volksbank, they receive a notification that allows them to activate the payment service. The Trusted Service Manager operated by G&D then ensures that the payment application and data pertaining to payment and security are transferred via the mobile network to a secure element on the SIM card using a multiply encrypted connection.

“The MasterCard PayPass dual-interface credit card was developed as the first contactless credit card. The paySticker, a small contactless credit card that can be affixed to a handset, is a stepping stone on the road toward mobile payment with cellphones. Now, we have taken the next innovative step and are providing a virtual credit card integrated in the smartphone. The order and delivery process for the ClassicCard Mobile complies with all security guidelines laid down for card products – a success that owes a lot to our collaboration with G&D, which went beyond the TSM service itself,” explains Franz-J. Köllner, member of the executive board at the Deutscher Genossenschafts-Verlag eG.

“Our trusted partnership with DG VERLAG goes back many years. We worked closely together to develop a technology solution on the basis of our tried-and-tested TSM technology, and this has laid the foundation for cooperative banks’ customers to be able to pay quickly and securely using their cellphones,” says Michael Kuemmerle, Group Executive Mobile Security and member of G&D’s Management Board. The Munich-based technology group is currently working on the implementation of more than 20 TSM projects worldwide.