Martin Gutberlet discusses mobile payment trends and technologies, specifically near field communication (NFC) and whether it will unlock new opportunities. NFC uses RFID technology to enable contactless transactions between devices within close proximity. While NFC shows potential, challenges include security vulnerabilities and defining business models and revenue sharing among partners. Gutberlet analyzes potential mPass wallet approaches and estimates low revenues of 5 million euros based on assumptions of transaction volumes, fees, and revenue sharing. He concludes mobile wallets will eventually replace cards but short-term confusion and a lack of standardization could slow mass adoption.

1. Vodafone
Technology Forum
2 November 2011
Dusseldorf, Germany
Mobile Payment -
Will NFC finally unlock a new value chain?
Martin Gutberlet
Technology Manager
martin.gutberlet@icloud.com
+49 (0) 172 2804475

2. Top 10 Mobile Trends
and Technologies to Watch
HTML5
NFC & "touch to act" applications such as payment
Platform independent AD tools
Location & Context - indoor & outdoor
Bluetooth 4
802.11ac
M2M - cellular and WiFi
Augmented reality
Multiplatform MDM
LTE 8
More effective application delivery
New business opportunities
Innovative apps & experiences
Management and control
Better infrastructure
Top 10 Mobile Trends and Technologies to Watch

3. Publication Date: 12 August 2011/ID Number: G00215749 Page 6 of 96
Figure 1. Hype Cycle for Consumer Technologies, 2011
Source: Gartner (August 2011)
Near Field Communication is Hype

4. NFC - The Technology
RFID Technology at13.56 MHz
Distance: 0-20cm, up to 424 Kbit/s
Connecting Technology between
Smartcards, RFID and mobile systems
Standards: ECMA-340 and ISO/IEC 18092 (FeliCa, Mifare)
ISO 14443 (backward compatibilty smartcards)
Security concerns:
Man in the middle attack - Use secure channel
NFC Chipset and SIM Card - ETSI/SCP
User Data ownership - today‘s emotional TSM discussion

5. Mobile Payment & Mobile Wallet
Consumer electronics
Loyality & Coupons
Check in
Access Control
Healthcare
Transport
NFC Touch & Act Opportunities

6. The mobile payment idea
Defintion:
Mobile payment is a point-of-sale
transaction conducted using a mobile
device.

7. The future evolution of payment

8. 0
100.000
200.000
300.000
400.000
2008 2010 2012 2014
Mobile Payment Users
0
5.000
10.000
15.000
20.000
2008 2010 2012 2014
Mobile Payment TransactionVolume
Mobile NFC
Mobile Payment Users 2015:
350 Mio, ww
Mobile Transactions 2015:
426 Mio, ww
32 Mio NFC, ww
Mobile Payment shows a tremendous uptake

9. mWallet
Pros and Cons of 4 different approaches
Launched in US
already
Only Android
phones support
Limited carrier and
clearing support, yet
Integrated with
Google Offers
Vodafone‘s
mWallet approach
not launched, yet
Enhanced security
with SIM
integration
Multi OS
can be supported
Vodafone
only
m-commerce
alliance
NFC not
supported yet
80% reach
in Germany
Complex
alliance structure
Carrier
centric approach
Leading e-commerce
provider already
online Wallet
NFC App
on Android
phones
Commercial
model to be defined
Carrier
independent
approach

10. mPass - Business Considerations
Difficult alliance structure with competing interests
Earlier approaches such as Paybox failed
Business case will be based on transaction fees - still not defined
Gartner Forecast Mobile Payment 2015
Total Mobile Payment TransactionVolume Germany 19 Bil. USD
SMS 14 Bil. USD
NFC 1.4 Bil USD
mpass Market share 10% (assumption) Transaction fee 1% (assumption)
SMS 1.4 Bil. USD SMS 14 Mio USD
NFC 0.14 Bil. USD NFC 1.4 Mio USD
Devided between 3 parties (40:40:20)
Vodafone SMS 4.7 Mio
Vodafone NFC 0.5 Mio
Business case for a total turnover of 5 Mio USD???

11. Conclusion and outlook
• Mobile Wallets will replace card payments and will
dominate micro billing long term
• Market confusion and security issues due to
multiple offerings short term
• Carrier driven online payment systems may fail
• Mobile wallet uptake should be driven through
coupons & loyality programs
• Enterprise NFC applications will require IT
customization capabilities and may drive high
margin business

12. Questions?