Next steps for NFC and mobile wallets

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Chrystal Jefferson
5 years ago
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1 Next steps for NFC and mobile wallets PSE Consulting Merchant Acquiring Conference Mike Hendry Payment Systems Consultant Mike Hendry Page 1 1

2 Next steps for NFC and mobile wallets State of the (dis-) Union Infrastructure developments Stakeholders and their activities NFC applications and services Next steps Mike Hendry Page 2 2

3 NFC and mobile wallets Convergence of interests:?? MNOs Chip manufacturers Handset manufacturers OS & software developers Data ransackers Media Retail Public transport Payment Mike Hendry Page 3 3

4 Mobile Mobile market 2013 has seen new milestones in penetration, data-rates, connectivity and functionality UK market is world-leading Mobile technology Nokia -> Microsoft, Windows Phone BB deflates -> Two Mobile OSs share 85% of market for new devices Is this a healthy market? Mike Hendry Page 4 4

5 M-commerce and m-payments M-commerce is booming Tending to focus sales on most popular sites Contactless payments not doing badly (in some countries) 0.1% of card payments by value Source: UK Cards Association Source: emarketer Sept 2013 Mike Hendry Page 5 5

6 But NFC payments and mobile wallets Mike Hendry Page 6 6

7 Next steps for NFC and mobile wallets State of the (dis-) Union Infrastructure developments Stakeholders and their activities NFC applications and services Next steps Mike Hendry Page 7 7

NFC infrastructure Interoperability demands hub services and TSMs Now easy to set up TSM plenty exist Single TSM vs separate Issuer and Service Provider TSMs?

8 NFC infrastructure Interoperability demands hub services and TSMs Now easy to set up TSM plenty exist Single TSM vs separate Issuer and Service Provider TSMs? As services spread across borders, split model is inevitable Some sectors have hierarchical organisations, others (e.g. retail) are highly distributed Hub-of-hubs opportunities for integrators Secure Elements UICC, embedded, SmartSD, sleeves Now exist in hundreds of different formats Multiple SEs becoming the norm Mike Hendry Page 8 8

keep doing it! What is impact of Android Host Card Emulation?

9 Mobile wallets Wallets struggling in most of the world Google vs Isis (but both now nationwide) French rollout delayed (Sixpack abandoned in 2012) Weve UDI But Asians just keep doing it! What is impact of Android Host Card Emulation? Can you build a secure card environment using HCE? Could you get it certified by EMVCo? Does that matter? Mike Hendry Page 9 9

10 Banking technology How has the infrastructure adapted to technology change? ISO in 2022? Mike Hendry Page 10 10

11 Next steps for NFC and mobile wallets State of the (dis-) Union Infrastructure developments NFC applications and services Stakeholders and their activities Next steps Mike Hendry Page 11 11

12 Marketing and advertising Mike Hendry Page 12 12

13 Retail Store operations Customer management Loyalty and coupons Maximises return on investment Replaces kiosks with low-cost passive devices Mike Hendry Page 13 13

14 Transportation Public transport Mostly ticketing rather than payment Download ticket to phone Tap in / inspect / tap out Airlines Boarding pass Baggage handling Information Parking, taxis Mike Hendry Page 14 14

15 Consumer-ready apps (no SP) Peer-to-peer File- and contact-sharing Pairing Quick commands Status changes (home, car, office etc) Call emergency numbers Assistive apps Mike Hendry Page 15 15

16 NFC applications and services Most apps do not involve payment! other than in Japan & Korea Mike Hendry Page 16 16

17 Next steps for NFC and mobile wallets State of the (dis-) Union Infrastructure developments NFC applications and services Stakeholders and their activities Next steps Mike Hendry Page 17 17

18 NFC & wallet stakeholders: direct & B2B Mike Hendry Page 18 18

19 What are the stakeholders doing? MNOs Working flat out on 3/4G Little bandwidth or investment for wallets or NFC GSMA Handset mfrs Apple Google Chipset & SE mfrs App developers Service Providers Terminal & reader suppliers Banks & PSPs New standards, e.g. process flow at POS Most just doing it (with or without embedded SE) See next slide Major changes in each Android release (are they all improvements?) Universal support Many more open than secure apps Increasing numbers of single-sp (branded) apps Making everything portable and wireless More rules Mike Hendry Page 19 19

20 NFC vs BLE Apple prefers Bluetooth Low-Energy to NFC Well, they would, wouldn t they? Broadcast vs one-to-one Assange Snowden vs MI5 GCHQ models Horses for courses NFC is opt-in, consumer choice Need NFC to secure BLE?? Mike Hendry Page 20 20

21 Next steps for NFC and mobile wallets State of the (dis-) Union Infrastructure developments NFC applications and services Stakeholders and their activities Next steps Mike Hendry Page 21 21

22 Next steps - global Need major push on interoperability and certification Standards for public transport (e.g. OSPT), retail (currently GSMA but needs to be ARTS or similar) EMV certification: needs a) Much more consistency in antenna size & placement b) Application selection: Android changes needed? Educate developers and Service Providers They can help to educate consumers but must first stop misleading them! Mike Hendry Page 22 22

23 Next steps UK Easy steps first: Accept that there will be multiple wallets Not just focused on payment Recognise role of integrators & mobile specialists They are the people who can get services going Interoperability is a precondition for rollout Consumer education Tap when you buy your phone Who benefits from promoting the technology? Mike Hendry Page 23 23

24 Next steps Payment Service Providers Develop business model for mobile payment as a service to be integrated into other apps Probably actually a set of functions of which payment message exchange and settlement are the last steps Likely to need new risk management and risk-sharing models M-banking is the Trojan Horse Not so good for acquirers But acquirers as terminal network operators can still play a key role in delivering secure services to retailers & SPs Mike Hendry Page 24 24

25 Thank-you for your attention Mike Hendry Mike Hendry Page 25 25

GSM Association (GSMA) Mobile Ticketing Initiative

GSM Association (GSMA) Mobile Ticketing Initiative Sue Monahan Director - GSMA NA Clif Campbell Lead Member of Technical Staff AT&T April 2010 Content GSM World Today GSMA Overview GSMA M-Ticketing Initiative