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NFC goes full speed at WIMA

Week 16, 2007

NFC brings together all the major actors of the industry with a strong will to work together and to reach a future situation where handsets will be the center of everyone's mobile life, and especially everyone's preferred means of payment.

There has never been so many positive factors: the involvement of all the major banks and actors in the payment world, the involvement of all the major telcos, and the mobile communication industry, and more pilots than ever. The industry associations are doing a great job in promoting NFC by all means: the NFC Forum, the Mobey Forum and the GSM Association play their role in bringing bankers and telcos closer to each other. Another very positive factor showing the interest into the technology is the huge level of participation in the 1st European NFC competition during WIMA.

A few issues still remain on the best way to a full-NFC future. The NFC business model is not yet agreed upon. The cost of infrastructure, the way to share the income from NFC transactions, the ownership of the final customer relationship are still open issues. The responsibility for application management can be in the hands of telcos, banks or trusted third parties. Everyone in the industry has its opinion about these subjects, but as long as there is no consensus between the telcos and the banks, a large deployment of NFC applications has little chances to happen.

Once business model issues will be solved, the technical issues will be easy. The business model choice dictates the location of the Secure Element (NFC security chip can be inside the SIM, inside the handset chipset, or as a separate chip). The business model choice will drive the standardization process, and drive the development of all the necessary bits and pieces in the NFC ecosystem.

NFC supporters talk about an enhanced customer experience when making NFC transactions. Various opinions are expressed trying to anticipate the key driver that will start the NFC applications: will it be mass transit ticketing, contactless payment, marketing applications (smart posters, etc…) or handset-to-handset exchanges?

Thierry Spanjaard
Chief Editor
Smart Insights