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What new mobile services are enabled by NFC? As the mobile phone is ready for the next step to become our personal terminal for connecting to and communicating intuitively with an evermore electronic and intelligent environment, new business opportunities are created for mobile operators who are able to grab the initiative.
According to this research report, technologies such as NFC are enabling a completely new segment of mobile applications - proximity services or local services - but the industry first needs to settle several critical technical and pedagogic issues. The market is still guarded and fragmented, but in the long term consumers will not accept to handle multiple devices, cards, accounts and passwords. A long-term pragmatic view and initial cooperation is necessary to enable the paradigm shift that will morph the mobile phone into a terminal for communicating with intelligent objects in the environment.
“Local contact-less services are already available to over 50 million mobile users that can shop, travel and get information by just waving their phones over readers”, said Sabine Ehlers, associate analyst, Berg Insight. In Japan for example the service is well-established and a great success in terms of number of readers installed, service partners linked and subscriber terminals in use.
When it comes to actually applying the technology however, the mass of consumers apparently need time to change deep-rooted behaviours. In Europe the development is held back by uncertainty about business models and the lack of coordination between different players. Especially mobile operators regard the new business field with caution due to its lack of obvious revenues for network owners. Berg Insight does however identify several important contributions from the operators, and reasons why they cannot afford to stay outside this exciting new field.
The report gives a thorough technical background to the contact-less mobile field, identifies the best strategies for initial services and how to progress from there, and discusses experiences from a large number of trials and services from around the world.
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Table of Contents
Table of Contents i
List of Figures. iv
Executive summary1
1 Introduction.3
1.1 The next step in mobile evolution: local services..3
1.1.1 Information retrieval..4
1.1.2 Authentication and access 5
1.1.3 Payment .7
1.1.4 Ticketing .7
1.1.5 Device to device communication..8
1.2 Ecosystem .8
1.2.1 Value chain9
1.2.2 The role of the mobile operator11
2 Proximity technologies 15
2.1 Some contact-less technologies .15
2.1.1 RFID15
2.1.2 Contact-less smart cards 17
2.1.3 Bluetooth and IrDA.22
2.2 Contact-less mobile: NFC ..23
2.2.1 Usage modes 23
2.2.2 Standardisation 24
2.3 Handset considerations27
2.3.1 Handling of authentication data ..27
2.3.2 Design of multi-application chips30
2.3.3 Location of the secure element30
2.3.4 Download and activation procedure.33
2.3.5 Cost 35
3 Payment applications ..37
3.1 Introduction.37
3.1.1 Drivers for change..38
3.1.2 Transaction types40
3.2 Mobile payments .45
3.2.1 OTA versus proximity 46
3.2.2 The value chain 47
3.2.3 Device-based vs. server-based accounts ..49
3.2.4 Security versus speed..49
3.2.5 Success factors 50
3.3 Examples of activities 51
3.3.1 Globally: Operators unite behind Pay-buy-mobile initiative..52
3.3.2 Turkey: Bank takes clever low-tech approach to contact-less 54
3.3.3 Austria: Operator upgrading payment to NFC.54
3.3.4 Taiwan: Multiple NFC field trials pave way for service launches 55
3.3.5 South Korea: Card issuer driving service57
3.3.6 Japan: Mobile operator becomes financial service provider 57
4 Ticketing and coupon applications ..63
4.1 Introduction.63
4.1.1 Technical configuration63
4.1.2 NFC 64
4.1.3 Strengths .65
4.1.4 Critical success factors 67
4.2 Event ticketing ..68
4.2.1 Live events..68
4.2.2 Cinemas ..69
4.3 Air travel ticketing 70
4.3.1 Electronic tickets .71
4.3.2 Bar code boarding passes.71
4.3.3 Mobile tickets and boarding passes .72
4.3.4 Issues 72
4.3.5 Examples of activities 73
4.4 Rail transport .76
MOBILE PROXIMITY SERVICES INDEX
iii STRATEGIC RESEARCH SERIES VAS RESEARCH SERIES
4.5 Mobile coupons82
4.5.1 Technical configuration83
4.5.2 Challenges .86
4.5.3 Critical success factors 88
4.5.4 Examples of activities88
5 Case study: Japan.93
5.1 The manufacturer: The technology FeliCa.93
5.2 The operator: The wallet phone Osaifu ketai 94
5.3 The transport company: The payment card Suica.96
5.3.1 Mobile Suica..97
5.3.2 Marketing services .98
5.3.3 Private transport companies create the Suica-compatible PASMO system.98
6 Conclusions and strategic advice101
6.1 Business model .101
6.2 Technical choices.103
6.3 Service design 109
6.4 Applications .113
6.4.1 Payment 113
6.4.2 Ticketing 114
6.4.3 Marketing..116
6.4.4 Peer-to-peer, access and other services .116
6.5 Addressable markets..117
Glossary 119
Index
List of Figures
Figure 1.1: Evolution of the mobile phone function..3
Figure 1.2: Simplified value chain for proximity applications 10
Figure 1.3: Rationales for mobile operators to participate in proximity services 12
Figure 2.1: Contact-less smart card shipments (World 2007)..18
Figure 2.2: Number of contact-less smart cards by system (2007) ..19
Figure 2.3: Contact-less payment card deployments in Asia and Europe.20
Figure 2.4: Bluetooth technical data ..22
Figure 2.5: NFC usage modes..24
Figure 2.6: NFC technical standard overview25
Figure 2.7: NFC handset service architecture ..27
Figure 2.8: NFC enabled handsets from Nokia 31
Figure 2.9: NFC SE chip solution options ..32
Figure 2.10: Examples of NFC security models ..33
Figure 3.1: Examples of successful contact-less electronic purse card services ..41
Figure 3.2: Examples of debit and payment card services 42
Figure 3.3: Examples of online payment services ..44
Figure 3.4: Comparison of OTA and proximity models for mobile payments..46
Figure 3.5: Probable usage areas for the different payment types 47
Figure 3.6: Comparison of device-based and server-based accounts 49
Figure 3.7: Proposed business models for the GSMA Pay-Buy-Mobile initiative53
Figure 3.8: Proximity payment using the Visa Contactless application56
Figure 3.9: Overview of NTT DoCoMo’s DCMX credit card service ..59
Figure 3.10: Usage data for electronic cash-enabled mobile phones .60
Figure 4.1: Advantages of mobile ticketing 65
Figure 4.2: Examples of how ToruCa dedicated information can be pulled by the phone89
For full details, please email keithw@cmsinfo.com
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