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NFC City Berlin: Mobile payment project successfully completed and confirms consumer interest in mobile solutions

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  • NFC acceptance network in Berlin expanded with 1,000 participating stores
  • Awareness: 39 percent of the Berlin residents surveyed have heard about the mobile payment initiative
  • 53 percent of all smartphone users in Germany would be willing to use mobile payment solutions

One year, 25 partners, 1,000 additional stores accepting NFC – those were the results achieved by the participants in NFC City Berlin when the project came to a conclusion. The initiative began in 2015 with the intention of bolstering the acceptance of mobile payment solutions in Berlin by raising consumer awareness of this innovative way to make purchases. The project was successfully completed on April 30, 2016.

NFC City Berlin sets the stage

The purpose of the initiative was to serve as an impetus for mobile payment based on Near Field Communication (NFC) technology. The partners helped pave the way for establishing mobile payment in the city. "Some 1,000 shops in Berlin were equipped with NFC terminals so that a vast number of customers could be reached. What's more, other retailers not directly involved were also encouraged to support the mobile payment concept. The NFC City Berlin initiative represented a key step toward promoting the idea and acceptance of mobile payment by making it more attractive to consumers," says Karsten Pudzich, General Manager East for Real stores, on behalf of the initiative partners. Consumers with experience using mobile devices can also take advantage of NFC technology when dealing with the partners of NFC City Berlin and other project supporters – more than 2,000 shops in the capital city now accept mobile payment. And throughout Germany many retailers are getting ready to adopt NFC payment technology.

The project was also a great success in terms of consumer readiness to "go mobile" while shopping. The GfK market research institute, along with Nielsen, Research Now and POSpulse, conducted consumer surveys during the project. The result: 39 percent of Berlin's Android users surveyed by GfK claimed that they recognized the logo of the initiative. Nielsen and Research Now conducted a representative survey and discovered that 53 percent of all smartphone users in Germany would be willing to use their devices for mobile payment applications. It also became clear that mobile payment providers could increase the acceptance of their solutions by making the installation process much easier and by providing more information about data privacy.

Lessons learned from consumers

"The number of transactions during the duration of the project remained relatively stable and reflected a certain degree of consumer hesitancy. We learned that consumers are more likely to experiment with payment methods before they actually use them for their daily purchases," says Ercan Kilic, Project Manager at GS1 Germany. The average amount spent per mobile transaction was about EUR 10. "The market survey conducted by POSpulse revealed that 79 percent of those consumers surveyed would be quite willing to use mobile payment solutions for higher sums."

"We gained many ideas and valuable information that will now be incorporated in the development of mobile wallets," says Frank Vahldiek, Director Consumer Services Innovation at Vodafone Deutschland. The surveys indicated that the registration process needs to be simplified. Mobile communications specialists are already taking action. For example, discussions with various banks and payment providers are already underway to promote the digitization of payment cards for smartphones.

The background of NFC City Berlin

NFC City Berlin was launched in April 2015 by six leading retailers and all mobile communications providers under the umbrella of GS1 Germany. The motto "just pay mobile" was promoted by retail partners that included Galeria Kaufhof, Kaiser’s, Obi, Real (a member of the Metro Group), Rewe, Penny, Temma and Oh Angie (a member of the Rewe Group). Technology partners included Telekom Deutschland, Telefónica Deutschland and Vodafone Deutschland – all project participants equipped their stores and shops in Berlin with mobile payment solutions. Additional partners joined the initiative once things started rolling. The collaboration was made possible thanks to GS1 Germany serving as a neutral platform. The organization is primarily known for its work in the barcode segment.

"Mobile payment via the NFC standard is on solid footing one year after the project in Germany," according to Kilic. "We want to thank all of our partners in the retail segment, mobile communications and market research for their extraordinary support of this joint project.“

The initiative officially ended on April 30, 2016. However, the participants still continue to offer their customers mobile payment options. Consumers wanting to know more should visit www.zahl-einfach-mobil.de for information and details about NFC City Berlin.

NFC City Berlin is a joint initiative launched in April 2015 by mobile communications providers Telekom Deutschland, Telefónica Deutschland and Vodafone Deutschland, along with the retailers Galeria Kaufhof, Kaiser’s, Obi, Real (a member of the Metro Group), Rewe, Penny, Temma and Oh Angie (a member of the Rewe Group). The purpose of the collaboration is to raise consumer awareness of the easy, convenient and secure mobile payment transactions possible using enabled smartphones. The initiative also strives to promote and encourage the use and acceptance of mobile payment solutions in today's market. NFC City Berlin originated with GS1 Germany. For about four years now GS1 Germany has been advocating the development of cross-retail mobile commerce solutions. NFC is the English abbreviation for "Near Field Communication." NFC is an international standard for mobile data communication across extremely short distances.

GS1 Germany supports all branches of industry when it comes to the application of modern communication and process standards so that business processed can be optimized. The organization is primarily known in Germany for its development of the unambiguous GS1 article number system used worldwide – which serves as the basis for barcode technology. GS1 Germany also supports the use of new technologies for fully automated identification of objects (EPC/RFID) and for standardized electronic communications (EDI). It also focuses on solutions for more consumer orientation (ECR – Efficient Consumer Response) and trends such as mobile commerce, multichanneling, sustainability and tracking. GS1 Germany is part of the international GS1 network and – following the USA – is the second-largest of the more than 110 GS1 national organizations. The not-for-profit stakeholders are the EHI Retail Institute and the German Brands Association.

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