IDTechEx
NFC – Near Field Communications
Trevor Crotch-Harvey
Director, Business Development
tch@idtechex.com
IDTechEx
www.idtechex.com
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NFC
IDTechEx
• Co-operation started 2002; public
announcement by Nokia, Philips & Sony at
RFID Smart Labels USA in March 2004
• First commercial product by Nokia in 2005
• Current status
• Value chain & players
• Issues - infrastructure, revenue sharing
• IDTechEx assessment & forecasts
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IDTechEx
Applications
Reader
mode
Pass the gate
Card emulation
Pay without cash
Get your Receipt
Read a map from
advertising
(Smart posters)
Access Control
Physical Access
Control
Source: Inside Contactless
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Exchange photos
(Peer to peer)
Pairing devices
(Peer to peer)
Device to device
mode
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Current Status
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DoCoMo/Suica, Japan
• Based on Sony
proprietary FeliCa
technology
IDTechEx
DoCoMo
• 21M users end 2006
• 100K payment
locations
– Train ,Subway
– Payment
Source: Inside Contactless
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Caen, France
• Started in October 2005 with
~200 participants
• Organised by France Telecom,
Groupe LaSer, Orange, NXP,
Samsung, Vinci Park
• Secure payment in selected
retail stores & access control to
parking
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Hanau, Germany
• Started in April 2005 with ~160
participants
• Organised by RMV (Rhein-Main
Verkehrsverbund), Nokia & NXP
• E-ticketing & loyalty programmes
at local restaurants, shops &
attraction parks
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IDTechEx
Update from China
• Nokia NFC phones on sale in
August in SE port city of
Xiamen, site of China’s first NFC
trial, June 2006
• Collaborators: Nokia, China
Fujian Mobile Communications,
Xiamen E-Tong Card, Philips
• Nokia NFC phones also to be
available in Guangzhou &
Beijing
• New phones come preloaded
with transit purse for bus & ferry
services, enabling subscribers to
tap phones to pay fares & make
retail purchases at ~100
merchant locations
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IDTechEx
Taiwan
• October 2005, commuters began trialling NFC on Taipei transport
– 100 volunteers; mobile phones from BenQ in Taiwan
– Building on existing MIFARE infrastructure
– 1st step in Taiwan Proximity Mobile Transaction Service Alliance
(PMTSA) programme to develop NFC; includes Acer, BenQ,
Chunghwa Telecom, Far EastTone Telecom, Taipei Smart Card Co,
Taiwan Cellular Corp, Asia Pacific Broadband Wireless
Communications, ViVOTech, MasterCard International, Visa
International, Philips
– Govt heavily involved, pushing for creation of PMTSA & driving
discussions
• ViVOtech NFC infrastructure software part of joint initiative by
MasterCard, Taipei Fubon Bank & Taiwan Mobile
– Results of survey conducted of MasterCard Mobile with PayPass™:
>75% of participants preferred using MasterCard PayPass on
mobiles than traditional contact-based cards
• Farglory, property developer, announced that residents of 4 new
complexes in Taipei will begin using cell phones to open doors each home provided with 2 BenQ T80 handsets
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Philips Arena, Atlanta
•
Collaboration between Chase, Cingular Wireless, Nokia, Philips, Visa
USA, & ViVOtech, with Atlanta Spirit, parent co of NBA’s Atlanta
Hawks, NHL’s Atlanta Thrashers & Philips Arena
– Trial designed to enable secure, wireless system that simplifies payment
& services for arena visitors
•
Users purchase items by holding their NFC phones near a secure
terminal
– ~150 contactless POS readers deployed throughout Philips Arena
– For mobile content downloads, Cingular Wireless is carrier
•
Key findings include:
– Participants overwhelmingly embraced technology & expressed that the
mobile device & applications significantly improved their arena experience
– Data usage increased during game days; trial participants used their
NFC-enabled mobile device more frequently to search for & purchase
digital content
– Participants indicated they would like to use their mobile devices for
payment at a variety of merchant locations, for any purchase size, & see
value in accessing multiple payment accounts on their mobile devices in
future
– Participants expressed interest in having multiple applications on a single
mobile device, including transit, loyalty and digital content applications
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IDTechEx
Where Do We Stand in 2007?
• Working Groups
–
–
–
–
• Standardisation
– NFC-Forum
– ETSI (SWP & HCI)
– Global Platform
NFC Forum
GSMA working group
StoLPaN
French Transport/MNO
• Awareness
• Trials
– Transport
– Payment
– +++
Moving along, not quite there yet
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– CES
– 3GSM
– WIMA
– SIMPosium
– NFC Summits
Source: Inside Contactless
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Players & Issues
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IDTechEx
Mobile Payments Stakeholders
Application
Providers
Chip/
Handset
Manufacturer
SIM/Payment
Software
Developers
Issuing
Processor
Issuer
Mobile
Operator
Payment
Network
Acquiring
Processor
Trusted
Service
Manager
Merchant
Acquirer
Consumer
Proprietary
Payment
Applications
Source: Smart Card Alliance
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IDTechEx
NFC Forum Members
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Chicken & Egg Infra Issue Being
Addressed (to some extent)
• Contactless Payment rollout
– Not dependent on NFC
– USA 20M cards, 40K
Locations, 250K terminals
– Asia, LATAM, Europe, rollout 2007/8
• UK, Spain, Poland, Turkey
IDTechEx
• Contactless Transport
Infrastructure in major
cites
– Seoul, Beijing, Paris,
London, Singapore, Tokyo,
HK, NY, Washington …
– But many proprietary
systems
Source: Inside Contactless
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IDTechEx
Where Does NFC Reside?
Comparison of economic options for RFID enabled phones
OPTION FOR LOCATION OF
CONTACTLESS
APPLICATION
GOOD
BAD
SIM
All GSM phones have them. Phone
operator controls it and is motivated to
promote service. Uploads of new
services are possible.
Phone maker does not gain.
SIM is a contacted card and therefore
relatively unreliable. Capacity may be
inadequate.
Flash
Plenty of capacity. Phone operator
controls it if it is SIM and is motivated to
promote service. Uploads of new
services are possible.
Few phones have flash cards
Secure chip
Provides phone maker with added value.
New phone needed for new applications
– helps sell phones. Reliable, low cost
option
Phone operator unlikely to be willing to
be excluded from value chain. New
phone needed for new applications –
user unfriendly, restrictive.
Source IDTechEx
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GSMA makes it clear transaction
service is driving force
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IDTechEx
•
Customers expect
convenient, friendly &
secure services
•
Service Providers want to
maximise use of existing
infrastructures
•
MNOs want to provide new
mobile contactless services
that are secure, high quality
•
MNOs want to leverage
long-standing customer
relationships to provide a
seamless service to both
Customer & Service
Provider
Source: Inside Contactless
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IDTechEx
NFC is Changing Contactless Value Chain…
NFC removes need to make & distribute cards…
• News, 21 August 2007: Gemalto & NXP Join Forces to Boost Mobile
NFC Solutions
• To develop SIM products compatible with existing payment & public
transport infrastructures
• Collaboration on SIM-enabled NFC solutions based on Single Wire
Protocol (SWP)
• Both companies will together define & develop SIM products for
SWP-based solutions to ensure interoperability with MIFARE
technology as well as other widely deployed contactless protocols
• Initiative from NXP & Gemalto aims to facilitate definition of
standardised SIM-based NFC products
• Also speed up availability of SIM-based NFC phones compliant with
telecom operators’ requirements
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Another View on the Power Play
• MNO’s may be gaining upper hand in debate over where to
put payment on NFC mobiles, but one Turkish bank said it
plans to resist
• Garanti Bank, which launched Europe’s largest contactless
payment card trial last year, in July began offering customers
smaller version they can stick on back of mobiles; tap
phones to make low-value purchases with PayPass–without
need for NFC handsets
• “It’s a power struggle between telcos and banks, and I think
the best way forward is to have even strength rather than
one dominating the other”
• Drawback: applications stored on contactless chips in
stickers cannot communicate with phone or mobile network
• Bank signed up 2-3,000 customers by SMS following TV
commercial featuring sticker
• Bank wants to tap Turkey’s pool of 45m+ mobile subscribers,
who may be willing to cover part of cost for stickers; these
new consumers could also attract more merchants
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IDTechEx
Changing Roles of Players - 1
• RATP
–
–
–
–
–
–
Involved in Paris NFC pilot with Bouygues Telecom
Changing role of players in Transport
No longer wishes to dictate ticketing medium
Core business is providing good transport
PC’s, Mobile phones, Internet are ubiquitous
Formerly 4 separate universes: PC, mobile,
internet, cards converging
– Organisations like RATP could become application
owners
– Don’t care on what physical medium travel rights
are stored
– Implies new commercial relationships between
service providers, MNO’s & system integrators
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Changing Roles of Players - 2
• Transport for London
– Piloting information system centres around Blackfriars
Underground station
– Offer maps, directions & travel advice transmitted to mobile
phones
– NFC technology embedded in 19 'touchpoint' posters
around station
– Will pinpoint location of passenger & transmit detailed &
up-to-date information about journey
– Project named VORTIX (Visualization of Real-time
Transport Interchange); collaboration between TfL, Imperial
College London & Kizoom
– Project developed by NXP Semiconductors & Sony
– Oyster payment function already taking form of an
application on contactless Barclaycard; NFC would be
short step
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IDTechEx
Other Issues/Points to Note
• NFC can be success without RFID
• Limited by available places to use; but –
contactless payment infrastructure rollout not
dependent on NFC
• Consumer expectations are for convenience &
ease of use, even when battery off
• Control of Secure Element
– Phone chipset/financial institutions vs SIM/MNO’s
– Who pays fees to whom & what will they be to
encourage deployment?
– When will this be decided so pilots can become
rollouts?
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IDTechEx
IDTechEx Assessment
•
NFC has strong momentum, backed by large players with deep pockets
•
Strong eventual growth forecast, starting in Japan/East Asia
•
More pilots happening
– Marseille, Bordeaux, Hong Kong, Australia, Korea, Amsterdam, Malaysia, USA
(Visa/Wells Fargo, MasterCard/Mobile Candy Dish Chicago, Discover/Motorola,
Tap & GoTM New York/Texas)
•
Consumer response
– Must be easy, simple, ubiquitous
– Say one thing, do another? Adoption rate yet to be proved – mobile
phones/SMS/security
– NFC enabled phones have to be as good as other phones
– Will more personal attacks result?
•
New commercial relationships between players to be developed & agreed
•
Technical implementations
– Need to reflect new commercial relationships
– Must be seamless & secure
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IDTechEx
Take Up of NFC by Region
Numbers of NFC phones by region 2007-2017 in millions…
700
Europe and other
North America
600
Other East Asia
Number million
500
Japan
400
300
200
100
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source IDTechEx
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