The Bosphorus, in Istanbul, is a body of water that separates the city into two continents – Europe and Asia. There are two toll bridges that connect the city. A fee is only charged going from the Europe to the Asian side. A large portion of the population crosses contents daily; whether across the bridge or using the sea buses. With a population of over 16 million the traffic gets out of hand during rush hour, especially across the two bridges. In order to alleviate the congestion when paying for the tolls a remote payment system and a contactless smart card were put in place in 2005. Now in addition to these systems an NFC payment can be used via NFC enabled Turkcell phones; using smartphones as a contactless device. The system currently works with Turkcell’s mobile wallet which has three banking applications available in one mobile wallet.
This sounds really good considering North American banks have been slower in the uptake of adopting NFC and mobile wallets. It is even more amazing though if you look at the traditional Turkish banking system. When visiting Turkey five years ago the stores had close to 10 banking transaction machines because each bank had their own system in place. Depending on the card and bank you used the sales clerk used a different machine. Even today, driving through Kadikoy, an area of Istanbul, you can see eight ATM machine stalls next to one another – one for each bank. In North America you rarely see two bank ATM machines next to one another.
What is the difference here? In the same country there is a discrepancy in banking and transaction adoption. With the NFC system it was a team of primarily technical people leading the way; whereas with the traditional ATM systems, it was the traditional bankers leading the way. Perhaps it is also due to the primary sponsor – the phone company leading the way rather than the banking industry. Innovation was achieved when a team non-native to the industry led the way. That meant that the conventional rules of the industry did not hold back the team. There was certainly a lot of thought and work put into securing the system but this did not hamper the banks from working with one another.
The NFC payments are only enabled on Turkcell branded phones but it does open up the way for other NFC enabled devices connected to mobile wallets to increase productivity in our daily life. In Ottawa, the bus passes are moving to smartcard based system (Presto Card). Only one more step to move it to NFC enabled phones. Perhaps one current hurdle to this may be the large market share that Apple holds in the North American since even their latest phone, iPhone 5, doesn’t have NFC embedded. But that may change in the near future.