Using mobile phones as swipe cards moved a step closer after the Fair Trade Commission Jan. 23 conditionally approved a bid by five major telecommunications companies and EasyCard Corp. to set up a trusted service management (TSM) company.
The five telecom carriers, Chunghwa Telecom Co., Taiwan Mobile Corp., Far EasTone Telecommunications Co., Asia Pacific Telecom Co. and Vibo Telecom Inc. will join EasyCard in setting up the TSM company, with paid-in capital provisionally set at NT$300 million (US$10.3 million).
Once the telecoms firms have set up the TSM, mobile users will be able to use their phones as workplace identification cards and residential access cards, as well as for swiping payments.
The FTC said that although the telecom companies and EasyCard had been given the go-ahead, conditions had been attached and the market would be open for other operators to enter later.
The five companies would not be allowed to prevent other firms from joining their TSM agreement, nor could they prevent another group of firms from establishing its own TSM system, the FTC said.
The TSM will have a lock-in period, making it hard for firms to exit, and for the four years following its establishment, participating firms and their related businesses would not be allowed to hold more than half the capital of the TSM firm, the FTC said.
Further, because of the wide usage of EasyCards, the company would not be permitted to hold more than 10 percent of the TSM firm’s total capital, the FTC added. Unless given prior approval, the TSM firm would be prohibited from providing financial services.