Overview – Smart Card Payments and m-Commerce
• Contactless cards are revolutionizing the payment industry.
• MasterCard working on initiatives to migrate to contact-less
readers in retail.
• Concerns over low-value transactions alone being mobile-
phone compatible. Higher values of transactions need to be
• Contactless smart cards would enable greater numbers of
m-commerce transactions worldwide.
• Tie-ups of online and mobile transactions would further boost
industry – companies like Paypal are working on this.
• Simple and powerful communication mode
• Short read range technology
• Typically operates at 13.56 MHz
• Secure transactions for short range communication
• Active and passive modes exist
• Mobile phone compatible
• Apart from P2P transactions, mobile banking and proximity
payment, NFC adoption for marketing purposes is expected to be
• Integration could vary from –
• Card Emulation
• Reader Mode
• P2P Mode
• Standards – Need to ensure inter-operability between various platforms
• Merchant Adoption for smaller-value transactions
• Co-operation between major participants in the eco-system; fee and
• Proving the business case to vendors who prefer standalone-
contactless based payment systems
• Ensuring significant installed base by 2015 – to achieve global NFC
• Gather momentum from pilot phase to enter roll out phase
Advantages of NFC – Payment perspective
• Brings simplicity and security across verticals.
• Ensures a higher degree of personalization, with no card swiping
or contactless card interference.
• One phone – for all applications; OTA personalization and
deployment for transit applications are predicted to drive growth.
• Enables tying in preferences with transactions. Ex: Saved
searches and preferred purchases could be brought up from
memory to make next automatic transaction.
• Trials in 2007 and 2008 – Include initiatives from Citi, HSBC,
Nokia, Vivotech, US Bank, Wachovia (now Citi), Wells Fargo,
Master Card – all in different deployment trials across application
• NFC Marketing is expected to be widely popular by 2015 –
enables marketers to reach consumer directly.
• Transactional Model – Fixed, per transaction
• Percentage share of merchant transactions
• Transaction fee
• Data traffic
• Application management on the handset
• Soft-card issuance
Global Handset Forecasts
Global Handset Sales Forecast
Global Handsets Sold (Millions)
1,000 735 795.4
2004 2005 2006 2007 2008 2009 2010 2011
• Though NFC is popular and is gaining momentum, with many US based
vendors showing interest, the returns on the investment in R&D on NFC
integrated with mobile payment has to be evaluated.
• Currently, the technology has to move beyond the pilot phase to the roll
out phase – the only way to reach more end-users.
• More and more targeted user segments (Ex: teens, young
professionals, etc.) should be brought into focus for spreading
• Economic slowdown in the US will affect NFC deployment – however,
the ecosystem’s stakeholders should ensure that a mandate is set for
complete deployment in the next 10 years or so – by 2020.
• The opportunities that NFC presents are immense; but the market is just
not ready yet – going by past evidence, NFC-oriented optimism needs
to translate into tangible market presence.
• Nokia handsets with NFC supporting Google Android is expected to
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