The Future of the NFC Ecosystem

The Future of the NFC Ecosystem

NFC-FutureWhereas various NFC research studies predict an amazing commercial future of NFC services, which may result in around 860 million NFC handsets being shipped worldwide and €110BN in payment value globally by 2015, the key question to success really is how the commercial quotes are going to be achieved in terms of operational and commercial business models. 

How to build the NFC Ecosystem

Throughout the last 5 years several cooperation initiatives have been established between banks, payment schemes, Mobile Operators and other Service Providers such as transport organisations or retailers, e.g. Ergosum in France or the recently filed NFC consortium initiative of the mobile operators in UK.

And still there is one major question: Who is going to have a leading role in the NFC industry play especially towards the customer interface?

  • Is it going to be the mobile operator because of providing a SIM card that may be the heart of all NFC services stored in a secure element on the SIM
  • Or is it going to stay as it is today with the difference that certain enrolment processes will have to be aligned among the parties.
  • Or will regulations have a major influence: As a matter of fact today due to legal requirements there cannot be a mobile payment service without a bank meeting the license requirements but there can be a mobile payment service without having a mobile operator enabling a bank. So is it going to be a bank centric approach using an external NFC card (e.g. MicroSD Card) that enables a mobile phone to support NFC payments?
  • Or is it all about the Google or Apple factor, driven by simplicity, rich consumer services and convenience.

Today it seems that the discussions tend to revolve more around technology owners and issuers of secure elements than having a real consumer focus. Finally, we may experience in the coming year major commercial rollouts supporting a collaboration model in terms of implementing a single NFC standard around major stakeholders in payment, transport, ticketing and mobile operations. This in order to share costs, risks as well as revenue versus a fragmented approach, which requires a massive market power and existing presence in order to succeed building their own ecosystem.

Given the complexity and multiple stakeholders needed to provide a compelling NFC service landscape, there seem to be almost no way around a collaboration format in order to provide a viable commercial offering to consumers.  

Have a good Christmas!

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