BlackBerry, Telefónica to trial NFC in Brazil in 2012

BlackBerry maker Research In Motion (RIM) (Nasdaq: RIMM) and Telefónica (NYSE: TEF) will run a pilot project on using near field communications (NFC) with credit cards in Brazil early next year, Adriano Lino, RIM's Latin America marketing intelligence manager.

"We have talked to Telefónica regarding several other initiatives in Latin America. They are talking to credit card companies and we are going to be part of a trial with Telefónica using NFC with credit cards early next year," Lino said.

According to the executive, NFC does not replace a credit card but provides a more secure means of using credit cards, minimizing the chance of fraud.

With an NFC-transaction the credit card password is never typed into the equipment of the merchant, only on the user's phone.

The news follows on the announcement this week that Telefónica Digital, the global business unit of Telefónica, and RIM had launched a mobile wallet pilot program for BlackBerry smartphones in collaboration with local banks and retailers for employees at its headquarters in Spain.

The trial will use the new NFC-enabled BlackBerry Bold 9900, Curve 9360 and Curve 9380, all of which run the new BlackBerry 7 operating system.

According to Lino, NFC technology has been around for several years but it is a "chicken or egg" scenario whereby handset manufacturers will refrain from including NFC until a critical mass of retailers and payment mechanisms accept it, but the latter will not accept it until they are guaranteed a significant number of users have NFC-enabled devices.

In that sense, BlackBerry is taking the initiative, Lino said, adding that RIM is not interested in being part of the value chain in NFC, unlike Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL), but merely promoting the use case of NFC.

"Once people understand the capabilities of NFC the feedback is very positive," he said.

In October, RIM announced that the BlackBerryBold 9900 and BlackBerryCurve 9360 smartphones had become the first SIM-based NFC smartphones to be certified by MasterCard (NYSE: MA) Worldwide as PayPass-approved devices.

In the same month, the company unveiled the BlackBerryTag, which will be incorporated into future devices using the BlackBerry 7 OS and will allow users to share contact information, documents, URLs, photos and other multimedia content by "tapping" their BlackBerry smartphones together using NFC.

"I think NFC is going to be much more than just mobile payments, of course mobile payments is an obvious first choice but there are many things people are starting to talk about with NFC like exchange of PINs, exchange of files, and now we're doing some trials using the BlackBerry as an [security] access point [for buildings]," Lino said.

The only obstacle that Lino sees for NFC, at least in terms of mobile payment, is local banking regulations.