I'm wondering if it is possible to create mobile app running on phone with nfc support to behave transparently like contactless payment card. User launch this app and put the phone to contactless terminal and then will be accomplished some communication between terminal and phone.
The goal is to provide payments between our users and merchants with contactless terminal. Our users are users of our application which is some sort of e-wallet. They have some credit in the wallet and we want them to spend the money for example in supermarket.
We assume that we will have agreement with merchants, but I want to know, if merchant can use contanctless terminals they have, without any HW or FW modifications. Or the terminals are hard-wired to VISA or EC/MC and accept only theirs cards?
Your Merchant terminal works under their Acquirer Bank (or Payment Service Provider) Environment. It is a property of Acquirer or Bank. Ask them dirrectly about your loyalty cards acceptance, but not the merchant. In other case Merchant will take all risks and questions resolution for your cards.
The acceptance of payment cards (or local loyalty cards like in you case) by the terminal itself depends from the terminal functionality.
Usually, without additional agreements between Merchant and Acquirer, only well known payment cards are accepted by the terminal - some card brands which are in the Acquiring agreement, especially contactless cards acceptance.
For sure you may try to reuse terminal readers and other HW. It is possible in some cases. But, due to security reasons, it is prohibited by the terminal owners (Acquirers, Terminal SW developers, Terminal vendors) without additional deal.