German bank trials iPhone payment system

German bank, Landesbank Berlin (LBB), in co-operation with Swiss Post Solutions, started a pilot project to provide contactless iPhone payments via Visa payWave, in Germany, Payment Observer reports.

Berlin-based LBB is the largest credit card issuer in Germany (with over 2.2 million cards issued). The bank plans to implement contactless payments via mobile phones nationwide by the end of this year.

As the iPhone does not support near field communications (NFC), LBB is issuing an iCaisse phone case, which holds a microSD card and an NFC antenna. The credit card information necessary for the authentication of a transaction is stored securely on the microSD card. The payment is triggered by an iPhone app. The customer can choose between two different methods: on automatic mode, amounts of less than EUR25 are authorised without password entry; on manual mode, the previously defined password has to be entered for each payment.

Landesbank customers will be able to tap the iPhones to pay where Visa payWave is accepted, although Germany is not one of Europe's contactless hotspots, like the UK, Turkey and Poland, so there are few, if any, locations inside Germany itself that accept payWave, NFC Times says.

Representatives from neither the bank nor Visa Europe were available to provide additional information, so it was not clear how many customers will participate in the trial or when it would begin. Swiss Post Solutions, which personalises cards for Landesbank Berlin, will also be involved in the trial.