"Potentials and Challenges for Mobile Commerce - a Nordic Perspective
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"Potentials and Challenges for Mobile Commerce - a Nordic Perspective

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The presentation provides service examples for mobile commerce in the Norwegian/Nordic market. It shows the fantastic increase of easy mCommerce services. Easy still means SMS-based services, as ...

The presentation provides service examples for mobile commerce in the Norwegian/Nordic market. It shows the fantastic increase of easy mCommerce services. Easy still means SMS-based services, as applications (applets) are still too specialised for many people. Even through trends from iPhone, Android and S60 applications show an increased usage, this increase is small as compared to the uptake of SMS-based banking services.

And we are all waiting for NFC, to give a real boost to mobile-initiated payment and access solutions.

This presentation was given at the Tamoco workshop in Merida in September 2009.

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  • 1. Center for Wireless Innovation Norway cwin.no CWI Norway TAMoCo workshop, Merida, Sep 2009 Potentials and Challenges for Mobile Commerce - a Nordic Perspective Josef Noll Professor Senior Advisor University of Oslo/UNIK Movation AS josef@unik.no josef.noll@movation.no
  • 2. .... and the Internet  Research and Education at Kjeller  Close relation to FFI, IFE, NILU,...  Prof. from Univ. of Trondheim and Oslo  The building where the Internet (Arpanet) came to Europe in June 1973 Source: Wikipedia Mobile Innovations Sep 2009, Josef Noll 2
  • 3. in t co mpanies ome o f the bes in wireles s es am itia tive wher nn ational te ry e xciting in he Norwegia "Movation is a ve mselves to build t e ommit th a Norway c innovation” ha ffey, Abeli ogy – Paul C technol founded by: “Innovation by Design” 3 Mobile Payment - Sept 2009 - Josef Noll
  • 4. Outline  Admittance, service access and payment  Mobile extensions  Introduction of Near-Field Communications (NFC) – Message: “Using the phone for payment and access” – Phone implementations  Roadmap – Single Wire Protocol (SWP), – Future SIM  “While waiting for the future SIM” – Alternative Solutions Mobile Innovations Sep 2009, Josef Noll 4
  • 5. Mobile Market • Mobile workforce: 40-70 • 2006: % of a group in different • 1020 million mobiles locations • 209 million PCs • 90 % of the employees • 4 Billion people with away from HQ mobile in 2009 • Q4/2006: > 30 % smartphones in Norway Nordic European • 20-30 % smartphones by 2009. 70,0 Opera Desktop Adobe Flash J2ME (Opera Mini) 52,5 90,0 35,0 67,5 17,5 45,0 0 22,5 2006 2008 2010 Smartphone penetration [%] in Europe and the 0 Nordic 2006 2008 2010 Handset functionality in market share [%] for the Nordic market [“Mobile Phone Evolution”, Movation White paper, May 2007] 5 Mobile Payment - Sept 2009 - Josef Noll
  • 6. Norway seems to have a highly favourable payment mix, Cash with lowest retail cash usage (McKinsey & Company 2005) Check Cards* Direct Debit Number of retail transactions per household, percent Transfers 100% 1 758 1 970 1 505 1 702 1 467 1 515 985 991 1085 1 403 1 237 1 068 1 184 1 0 1 1 2 1 0 2 0 3 3 3 4 1 2 5 5 3 2 7 2 1 0 5 3 5 9 0 1 12 1 7 6 2 13 17 3 17 0 13 15 4 25 0 0 13 0 0 0 5 8 0 98 93 93 87 86 82 82 79 78 75 72 71 70 PL SP IT PT GE AT SE CH BE NL UK FR NO *Including E -Purse 6 source: Bent Bentsen, 2008
  • 7. Service development on Mobile Phones Personalised broadband B3G: wireless services 3G: Multimedia communication 2G: Mobile telephony, SMS, FAX, Data 1G: Mobile telephony 1970 1980 1990 2000 2010 Original: B3G study, Jan 2001 Josef Noll, Sep 2004 Enabling Communication 7
  • 8. Phone with RFID & PKI • Workshop March 2003: RFID and the mobile phone • Three steps: • A: Single RFID chip in mobile phone • B: Dongle with RFID (to allow l SIM card with integrated RFID communication between RFID l Prototypes available from: and SIM/phone) – prototype – Giesecke & Devrient: demonstrated 09.2004 on Siemens phones – Gemplus: both on one chip, (terminated)  NFC • C: SIM card with integrated RFID (prototype 10.2004) Original: NFC and Payment, Sep 2004 Josef Noll, Sep 2004 Enabling Communication 8
  • 9. Mobile phone replaces purse, October 2004 Josef Noll, Sep 2004 Enabling Communication 9
  • 10. Customer adoption • More than 360.000 customers • Fastest growing distribution channel ever! DnB NOR and Postbanken SMS - Registered users per quarter 400 000 300 000 200 000 100 000 0 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 source: Ingjerd Blekeli Spiten, 2009 10 It happened - Q4.2007
  • 11. E-Invoice and friend services From 04800 To 04800 From 04800 You have received an Accept 10 E-Invoice from e-Invoice from Telenor NOK 300 is Telenor NOK 300; handled and will be due 01.06.2008. paid 01.06.2008 from Ref.id.: 10. you main account To accept: Send SMS Accept [ref.id] to 04800 To 04800 From 04800 We confirm that Pay Ben 100 Ingjerd has paid 100 to you by mobile. Best regards DnB NOR 11 source: Ingjerd Blekeli Spiten, 2009
  • 12. Who is the SMS customer? # of SMS by age - January 2009 100000 75000 - Age 9 – 96 years - 19 most active 50000 - Oldest customer 96 years 25000 0 1 11 21 31 41 51 61 71 81 source: Ingjerd Blekeli Spiten, 2009 12
  • 13. ViVOtech 2006: Contactless replaces cash Josef Noll, Sep 2004 Enabling Communication 13
  • 14. Device Fragmentation (handsets, operating system, security and network technologies) source: Svein Therkelsen, mBricks, 2008
  • 15. NFC is ... Passive operation:  RFID at 13.56 MHz 1) Phone=Reader has static  RF (modem) and protocolls magnetic field 2) Tag acts as resonator, “takes energy” ~1/r^6 1 Power decrease of static and electromagnetic field 0,75 0,5 1/r^2 0,25 1/r^6 0 0,8 1,6 2,4 3,2 4 4,8 5,6 6,4 7,2 8 8,8 9,6 Mobile Innovations Sep 2009, Josef Noll 15
  • 16. NFCIP-2 Interface and protocol (ISO/IEC 21481) Proximity Card Vicinity Card NFC device Reader Reader YES 340 okay Interface Standards NFC ECMA-340 ECMA-340 ISO/IEC 14443 ISO/IEC 15693 PCD mode VCD mode (MIFARE, FeliCa) (facility access) Mobile Innovations Sep 2009, Josef Noll 16
  • 17. Mobile Services, incl. NFC • Focus in 2008 on mobile • NFC needs next web generation phones • Push content upcoming • S60, UIQ, ... • Common Application development SMS authentication Push content Mobile Web NFC payment • Integrated 60 development 45 30 15 0 2006 2008 2010 Expected customer usage [%] “have tried” of mobile services in the Nordic Market [“Mobile Phone Evolution”, Movation White paper, May 2007] 17 Mobile Payment - Sept 2009 - Josef Noll
  • 18. NFC use cases  Payment and access – include Master-/Visacard in the phone – have small amount money electronically – admittance to work  Service Discovery – easy access to mobile services: Web page, SMS, call, ... – local information and proximity services (get a game)  Ticketing – Mobile tickets for plain, train, bus: Parents can order and distribute, ... Source: Nokia 6131 NFC Technical Product Description Mobile Innovations Sep 2009, Josef Noll 18
  • 19. Nokia 6131 Firmware ISO 14443 Source: Nokia 6131 NFC Technical Product Description Mobile Innovations Sep 2009, Josef Noll 19
  • 20. From GlobalPlatform’s SIM to Future SIM current Real Estate 3.rd Party sec. domains vision  To comply with 3G networking requirements (USIM) – Security features (algorithms and protocols), longer key lengths Current Telenor On-board – GSM uses EAP SIM: client authentication WEB server ! SIM (UICC) card IM – UMTS uses EAP AKA: Mutual authentication (from 2001) Multi- Thread  3rd party identities Plus ETSI SCP – ISIM application (IMS) 3 new phys IFs: – private user identity SUN – one or more public user 12 Mb/s USB 2009?ETSI SCP Plus identities (Java) phys IFs: 3 new – Long term secret (SWP) NFC 12 Mb/s USB NFC (SWP) Source: Judith Rossebø, Telenor Mobile Innovations Sep 2009, Josef Noll 20
  • 21. eHealth Payment Multimedia New UICC architecture EMV DRM ? PKI / eID Ticketing (DRM !) SIM SIM Electronic = IMSI ID= IMSI Purse MSISDN & MSISDN Common Phonebook Storage SIM Application Toolkit ! CAT UICC ID = ICCID GSM Allocated b/s USB NFC (or other) IF (2G/3G) IFs peed IF (1 connector) (5 connectors) Source: Judith Rossebø, Telenor Mobile Innovations Sep 2009, Josef Noll 21
  • 22. One natural NFC player? • Telecom Operators ✓ have established customer and content provider relation ✓ current business (content provider access) gets less important ✓ NFC is opportunity for new business – inhomogenous infrastructure at operators • Bank, Mastercard, Visa,... ✓ natural choice for payment solutions – micro-payment and small transactions not successful – integration of content providers is new area, mobile is Telecom • SIM card provider: Gemalto, G&D ✓ harmonised infrastructure – unknown for the customer, no trust relationship • Handset manufacturers – global market players No obvious NFC player, need Innovation partnership 22 Mobile Payment - Sept 2009 - Josef Noll
  • 23. Ecosystem: The collaborative business model – Telenor and DnB NOR establishes TSM Nordic AS in April 2008 Source : Mobey Forum Ltd. + Bent Bentsen, 2008 23
  • 24. The secure element: SIM card Identity and personalisation Service Authentication provider aggregator and Access provider Send key and Send info to • SIM is secure credentials recipient element NFC communication unit Send service to • controlled environment phone NFC2SIM • over-the-air update • open for applications SIM Smartcard interfaces ISO/IEC 7816 • SIM will be owned by user? • managed by trusted third party Josef Noll, “Who owns the SIM?”, 5 June 2007
  • 25. While waiting for Future SIM and SWP: Alternative Payment Solutions source: Petter Taugbøl, Encap, 2008 Mobile Innovations Sep 2009, Josef Noll 25
  • 26. Mobile BankID  Replacing the CodeCard or One Time Password with an authentication on your mobile Mobile Innovations Sep 2009, Josef Noll 26
  • 27. PayEx Mobile Java Application download and linked to PayEx konto Mobile phone used as payment channel Both for Internet and payment terminals Deduction from PayEx account Supports Person 2 Person transfer Sept. 2009: NFC payment 27 adopted from: John Olav Olsen, PayEx, 2008
  • 28. Airline booking Mobile payment Mobile payment Mobile banking Payment and Banking Mobile banking References source: Svein Therkelsen, mBricks, 2008
  • 29. Conclusions  “The last time we were connected by a wire was at birth!” [Motorola]  All services from your mobile  Why not earlier – Business model – Standardisation  Success criteria – known (SMS) – simple Mobile Innovations Sep 2009, Josef Noll 29
  • 30. “The fun of being in Norway” - Thanks to Juan Carlos Lopez Calvet from Telenor, Mushfiq, Gyuri from UNIK.... Eurescom colleagues (B3G study, RFID study), Bent Bentsen, Ingjerd Blekeli Spiten (DnBNOR), TrådløsFramtid, enCap,.... and many other companies Josef Noll, Sep 2004 Enabling Communication 30