Ronnie05's Blog

The NFC value chain

Posted in New Technologies by Manas Ganguly on September 2, 2012

Near Field communication is one of the most promising short distance radio technologies on the horizon for the impact it holds out to future of mobile /mobile payments, ticketing, health-care and retail-experience through handheld devices. Presenting a x-cube infographic on the NFC, detailing the scope, the  roadmap till date, devices, adoption and challenges

Source: xcube labs



Tagged with:

NFC calling: The Indian context

Posted in Industry updates by Manas Ganguly on January 2, 2012

A trend setting in the global operator community is focused and driving the standardized deployment of mobile NFC using the SIM as the secure element to provide authentication, security, and portability. Many handset vendors and mobile payment platform makers are tying up to make NFC a reality. Samsung Electronics has announced a NFC chip, Broadcom has unveiled a new family of NFC chips, Nokia has launched NFC enabled handsets in association with PayMate, HID Global in association with Sony has jointly developed contactless smart card reader platform. Back home, DMRC (Delhi Metro Rail Corporation) also has been in talks with NXP to explore how NFC can be deployed for ticketing through mobile in Delhi Metro. The more the merrier for a quicker adoption. However, the interoperability between players in the eco-system is very critical to the widespread adoption of NFC, enabling users to benefit from NFC services regardless of operator network or device type. Thus NFC enabled handset vendors and mobile payment platforms need to collaborate and create NFC platforms more aggressively.

NFC is definitely making inroads into the Indian market but slowly and gradually. RBI, recently approved daily transaction limit of Rs.50,000 through mobiles to encourage contactless payments in India. Considering the Indian scenario, where demand and the need stand at the bottom of the pyramid and where m-banking (banking the unbanked with the help of mobile) still needs to attain its full bloom; NFC, which is considered a technology for elites (urban population which is quite low as compared to rural population in India), is many levels up this pyramid. The RFID chips are yet to be deployed by the chipset makers on a mass scale. For technologies like NFC to successfully gain strong foothold in the Indian market, there are still other blocks to be placed right for this puzzle to get its final shape, there are many unanswered questions for the industry to solve such as
• Adoption of NFC by consumers who are already cluttered with a plethora of technological innovations
• Future of NFC as a sustainable business venture
• Deployment and development of the required infrastructure for these devices
• The business case for infrastructure required for this technology to be feasibly deployed in India.

NFC mobile payments still hold immense opportunity for their growth in the Indian market when it comes to contactless payments in the urban India. Although NFC is a relatively new technology, its adoption will sky rocket over the next few years.

Tagged with:

Apple: Of mobile and web payments and virtual currencies. The future of money transaction

Posted in Revenues and Monetization, Value added services and applications by Manas Ganguly on November 30, 2010

Apple for a while has been rumored to be interested in and working on mobile payments. Given the strength of Apple’s great innovation track record and the influence that Apple products wield over the industry, technology and the eco-system, Apple’s interest in Mobile payments is noteworthy. Time and again, repeatedly, Apple has brought forth innovations in various segments it has operated in viz. smartphones (iPhone), Tablets (iPad), Application (Apps store), Music (iTunes and iPod). Given Apple’s stake in Web 2.0 and Mobile 2.0 technologies, a mobile payment platform is a natural extension, a transaction enabler and the missing piece of the monetization game.

Not that Apple is new to the game. They are already doing mobile payments since they launched the iPhone. Their solution is built on an existing payment relationship – iTunes to download music on the web. Apple’s 160 million iTunes users outweigh Paypal’s 90 million.

Contactless payments or Near Field Communication chip iPhones could open up payments and they could help create new business models for in store payments. This could also couple with location based ads and other applications. Apple drove the development of new business models with the music and smart phones – depending on what they do they could change the rules by which different players interact to do payment and commerce. So they have the potential to move the NFC world forward significantly by developing a new tapestry of the hardware, software and business models to move it forward. While NFC has been on the horizon for a while with sporadic trials by Obopay and others, Apple moving into this space should ignite the market. Apple’s moves will have particularly powerful impact, and the only other player who is also mulling contactless payment solutions at this point is Google.

Apart from Contactless payments, Apple is also trying to specialize in allowing users to use their mobile phone number to purchase digital content on the web using their phone number and their phone bill. Boku, a gateway specialist in Mobile carrier billing is rumored to be in talks with Apple for a possible acquisition.

Then there is this talk of Apple trying to create an online Virtual currency much like the Facebook credits for the Application and iTunes purchases. There are significant volumes in there for Apple and again the eco-system is pretty well set and Apple would only need to put the online currency in place for this transaction system to talk off as well. This would mostly cater to P2P payments transfer, casual payments, payments to individual merchants, cross border remittances and check replacement. In markets where P2P is fully implemented it represents over 50% of the mobile payment transactions. This is a big opportunity and right in Obopay’s sweet spot.

Apple is already big in mobile payments with iTunes and Apps store and Apple would sooner be looking to leverage this play into a bigger pie of online and instore payments.

Profiling Near Field Communication

Posted in New Technologies, The Technology Ecosystem by Manas Ganguly on November 26, 2010

Web 2.0 Summit (San Francisco, 15th November 2010): Google CEO Eric Schmidt announces NFC integration in the Gingerbread release of Android.
In the same summit, RIM CEO, Jim Balsillie re-iterated “we’d be fools not to have [NFC] in the near term”.
According to reports Apple is also working on the NFC payments domain and would be coming up with their payment product sooner.
In July 2010, Nokia’s Anssi Vanjoki stated that all Nokia smartphones will have NFC from 2011
AT&T Mobility, T-Mobile USA and Verizon Wireless also have announced the launch of ISIS, an initiative to develop a single platform that will enable their combined 200million customers to make mobile payments using NFC with a launch planned over the next 18 months, with a nationwide rollout planned by 2013.

User Acceptance of NFC usages

Near-field Communication (NFC) is characterized as a very short-range radio communication technology with a lot of potential, especially when applied to mobile handsets. Imagine users using the cellphone to interact with posters, magazines, and even with products while at the store, and with such interaction initiating a request or search for related information in real-time. Other usages of NFC include the electronic wallet to make payments using handsets, the same way as with a credit card. NFC makes all this is possible. But NFC is still a young technology. That said, NFC-enabled handsets are being introduced into the market, and deployments and pilots around the world are occurring.

NFC is a short-range high-frequency wireless technology enabling devices to exchange data. It has long promised to enter the mobile phone industry and catalyse many new usage scenarios, from proximity payments and transactions to device pairing and data exchange. But despite gaining considerable traction in Japan, where at least 60 million devices are enabled for proximity payments, NFC has struggled to meet expectations elsewhere. This is despite the technology’s steadily growing presence outside the mobile domain in transportation (for example, London’s Oyster card and San Francisco’s Clipper card) and credit cards (for example, Visa’s payWave and MasterCard’s PayPass).

A comparison of short range communication technologies

The mobile phone’s unique position as the most pervasive item of consumer electronics makes it the logical device for NFC to establish ubiquity. While security remains a concern, the maturation of the mobile phone into a highly personal converged device that contains sensitive personal data and performs many other functions means potential social barriers to usage have largely been overcome. In that regard, NFC represents the basis for the next wave of innovation in the mobile space. This goes beyond the utilization of NFC for payments and transactions, the roll-out of which will be slowed by the associated complexity of commercial agreements and the requirement for consistent payment platforms. Therefore, simple applications that extend the versatility and intuitiveness of the mobile phone are likely to be what captures consumer imagination and drives adoption in the near term.

Examples include:
• Touching phones and other devices to share content, contact details or synchronize data. NFC would be used to initiate data transfer over Wi-Fi or another technology.
• Tapping an accessory such as a headset or speakers to establish Bluetooth pairing.
• “Checking-in” to a location for services such as Facebook and Foursquare. NFC could also enable the tagging of friends by touching their devices.
• Selecting applications to be purchased from a wall display in a store.
• Getting applications, vouchers or product details by touching an advertisement.

The boundless diversity of the scenarios enabled by NFC, coupled with the intuitiveness of “touch and go”, means that NFC represents a technological step as significant as the introduction of Wi-Fi. The ease with which NFC can facilitate data transfer means it is likely to play a central role in the pursuit of “convergence”, as it enables the pairing of devices and seamless movement of content from one to another.

Mobile Money:The $630 billion opportunity

Posted in Value added services and applications by Manas Ganguly on May 6, 2010

Mobile payments/Mobile banking has been in vogue for some time now. There is lot of promise that this mode of mobile transaction has shown for taking banking to the rural geographies in Africa and Asia. This is the next big billion dollar opportunity. Here’s a continuation of the mobile banking/payments story.

A new report by Juniper Research estimates the total value of mobile payments for digital and physical goods, money transfers and NFC (Near Field Communications) transactions will reach almost $630bn by 2014, up from $170bn this year, representing the gross value of all purchases or the value of money being transferred. This represents a 38% CAGR opportunity over the next 4 years. Read an earlier estimate on growth here

SMS ticketing schemes such as those offered by OBB Austrian Railways and Skane Traffic in Sweden have been important developments in the mobile payments market. It also revealed that shopping by mobile at stores such as Amazon Mobile is also tipped for significant expansion over the next five years.

Mobile Banking in action on the Mobile screen

The evolution of Mobile payments will be such that whilst the digital goods segment will account for nearly half of the market in 2010, the emerging segments such as physical goods payments, NFC and money transfers will impact the market rapidly. By 2014 for example we forecast that physical goods mobile payments market will be worth $100bn and that in developing markets SMS driven money transfer services are the main driver, increasing at a rate of 30% per annum.

NFC arriving soon than “sooner”: $30 Billion Opportunity in 3 years.

Posted in The Technology Ecosystem by Manas Ganguly on September 3, 2009

A new analysis from Juniper Research of the NFC opportunity forecasts that the application of NFC as a mobile retail marketing tool via coupons and smart posters will support the growth of NFC mobile payment transaction values from $8bn in 2009 to $30bn within three years. The new report found that such is the excitement about the potential of NFC, vendors are developing and launching a variety of interim solutions such as stickers and SD cards to get NFC to market faster on existing phones rather than new NFC enabled phones. The interim progression steps in the NFC world include NFC stickers affixed to the phone or any other portable device or stickers affixed to the SIM as in the case of Techmahindra and NFC SD cards that will plug into the SD card slot. There are also interim solutions including key fobs, companion “mini SD cards” and watches.

An example of an NFC sticker is the Twinlinx My Max NFC sticker, which is a 1.8mm thick electronic sticker that adds NFC capability to existing mobile phones. It uses Bluetooth to connect to the phone and has an internal rechargeable battery to get power independent of the phone battery.CPI and INSIDE created the industry’s first contactless sticker product for open loop /branded bank card payments. The sticker technology cobines the flexible Micropass 4003 contactless payment processor with a tuned RF antenna for payment sticker applications. The payment sticker, based on INSIDE’s MicroPass contactless chip technology, can be affixed to any portable device such as a phone. In December 2008, Giesecke and Devrient launched the first SD card (secure digital card) with integrated NFC capability. Although marketed with emphasis as a mobile security card, it can also be used for contactless mobile payment assuming availability of acceptance points equipped with a POS reader.

giesecke and Devrient

Giesecke and Devrient NFC SD Card


Twinlinx My-Max NFC Sticker

NFC Mobile Marketing Opportunity

The first wave of NFC services will centre on transport ticketing and payments (urban metro/train/bus/transit networks). STIF Paris has announced that it will deploy NFC transport ticketing in Paris by the end of 2010.That is as soon NFC could go mainstream in usage. These services will be supported by NFC infrastructure such as mobile coupons, smart posters, gift vouchers and loyalty programmes.There are numerous possibilities for one to one, personalized marketing opportunities and even consumers will be able to drive the type of offers and information that they would like to receive thereby reducing junk.

The $30 billion Marketing opportunity.

NFC will achieve traction initially in developed countries and regions with Japan leading the way. NFC based payment schemes are predominantly aimed as an alternative method of payment of cash for smaller transactions. Currently the transaction size limits are $25 in the USA, EUR20 in western Europe and GBP10 in the UK.

A small animation cliping on usage of the NFC:

Tagged with: , ,

The advent of Mobile point of sale transactions

Posted in Industry updates, The Technology Ecosystem by Manas Ganguly on April 14, 2009

I had in an earlier post covered the topic of mobile phone payments and phones that act as your wallet through the NFC (Near Field communications technology).

A significant development in this context was achioeved by the credit card major, VISA who have enabled the first mobile payment for a Point of Sale transaction, thus enabling the consumer to purchase an NFC enabled mobile device of the shelf and use that device to make the VISA pay wave enabled transaction at the point of sale instead of using their credit cards.This service waas launched in Malaysia early April 2009. Maxis Malaysia, Nokia, Maybank have collborated with VISA to offer its pay wave services on mobile devices. Initially this service is enabled in the Nokia 6212 handset and 1800 outlets in Malaysia.

The contactless chip embedded in the device will also power a number of additional functions, including a contactless transit application that enables Malaysian commuters to pay for charges while using metropolitan transit systems, bus terminals, highway toll gates and car park facilities at more than 3,000 contactless payment touch points throughout Malaysia. Maxis has branded these mobile payment services under the name Maxis FastTap.

Momentum for Visa Mobile Payments Continues to Grow

Visa is driving the convergence of two of the world’s most ubiquitous consumer products, 1.7 billion Visa cards and 4 billion mobile phones, by bringing its expertise in payments to the mobile industry. Over the last two years, Visa has worked closely with mobile network operators, handset manufacturers and financial institutions, merchants and technology provider to develop and commercialize mobile payments and related services. Recent Visa mobile payment activities include:

Visa announced last week that it is extending mobile payments to Singapore in partnership with Citibank Singapore Limited and MobileOne (M1). The Citi M1 Visa payWave payment trial on mobile devices marks the first program in Singapore where a mobile device will be used for payments at the point-of-sale. More than 750 merchant locations across Singapore are participating in the three-month pilot, which begins in May 2009. Up to 300 selected Citi M1 Visa Platinum account holders will be invited to join. Participating account holders will be provided a Nokia 6212 classic, the same NFC-enabled handset used in the commercial launch in Malaysia. Participating Citi M1 Visa Platinum account holders will be able to purchase an item at a Visa payWave merchant in Singapore simply by waving the mobile phone in front of a contactless reader at the point of sale.

In Canada, Visa, RBC, and Rogers Wireless have come together for the next phase of a mobile payment pilot, which will ultimately allow Canadians the flexibility to make purchases securely at the point of sale with a wave of their mobile phone. Designed to be a fast and convenient way for customers to pay for small purchases, pilot participants will be issued specially-equipped mobile phones that can simply be waved at Visa payWave-enabled checkout readers at select retail stores and quick-service restaurants in Toronto’s downtown core.

Tagged with: , ,

Of Mobile Wallets and Mobile Payments

Posted in Industry updates, Value added services and applications by Manas Ganguly on March 17, 2009

Wallet phones are mobile phones equiped to include bank cards, credit cards, house keys, company access control IDs, electronic cash, train tickets and many more functions. Wallet phones in principle can take over all functions which our wallet has.Wallet phones enable mobile operators to enter new industries, especially the payment and credit card industries. For this reason wallet phones represent innovation and disruption for established industries, such as credit cards.

Payments through mobile phones is a fundamental shift of paradigm occuring in the wireless communication industry. It originated in Japan. Due to declining ARPU Japanese mobile operators are creating new streams of income independent of voice or data traffic. This paradigm shift led DoCoMo to invest in financial institutions, create a credit brand, and make a series of other investments including brick-and-mortar business, while competing operators follow different strategies.
The NFC (near Field Communications) technology has been there on the horizon for sometime now. Currently, local mPayment transactions, also known as proximity mPayments or Near Field Communication (NFC), do not have much scope as only 1 percent of mobiles sold in 2008 were allegedly NFC-enabled and there is no widespread, popular recipient technology to complete an NFC payment. NFC is a technology that enables devices to wirelessly exchange data without physical contact within a range of 4 inches. It eliminates the need for all types of plastic transaction cards and, therefore, contributes towards saving the environment. It works in the 13.56 MHz radio frequency band, has a bandwidth of 2 MHz and can support 848 kbits per second exchange of data.
However, 2008 turned out to be the first big year of reckoning. In 2008, approximately $72 billion mobile initiated business was accrued via an estimated 25 billion transactions made by nearly 40 million consumers, which included roughly $24 billion for purchasing games, music and ringtones. 18% of US households wired to the internet have made sometype of mobile payment in 2008 including online bill payment, money transfers to individuals, online loan payments and online purchases. 

A new analysis by Juniper Research in mobile payments opportunity forecasts that, by 2013, the figures could jump exponentially to $860 billion generated made by close to 450 million consumers with 285 billion transactions, dedicated towards the purchase of physical goods (typically gifts and books) and services other than mobile content on- demand/digital goods (such as music, tickets and games). mMoneyTransfer is expected to generate more than $200 billion in 2013.
Highlights from the report include:

• Global annual gross transaction value will grow over 5 times by 2013

• The ticketing segment will be driven by consumer usage on rail, air and bus networks as well as sports and entertainment events This will represent over 40% of the global transaction value by 2013

• The top 2 regions (Far East and W. Europe) will represent over 60% of the $300bn p.a. global mobile payment gross transaction value by 2013 for digital and physical goods. Western Europe is currently dominated by digital goods and services sold via SMS, whereas the Far East & China region (specifically Japan) is already well established in physical goods sales over the mobile web, and has been for a number of years.

Informa estimates that by 2013 more than 10 percent of all mobiles in use will be NFC- enabled, technology support to receive NFC payment will be common, and these factors should facilitate close to 180 million users to pay restaurant bills, buy tickets, pay toll fees, and buy groceries, apparel and home equipment.

In 2008, only 67 million mobile phone users accessed mBanking services, whereas in 2013 the figure could reach one billion.
Amongst banks, mobile manufacturers and technology vendors, the buzz about Mobile payments is discernable. Recently Visa (the world’s largest electronic payments network), demonstrated its mobile payment solution at Dubai. With a network across 170 countries, it will not be too long before Visa takes the mobile payments technology to the mass.
The stumbling block in large scale adaption would do with threat perception of transaction security. An NFC survey by ABI research indicates the transaction security to be the concern amongst users. It is only a little time and the convenience factor, which will sway the users towards use of the m-Payment platform. 
Tagged with: ,
%d bloggers like this: