Mobile Contactless Payments Gain Momentum

Next week the 2008 CARTES & IDentification conference kicks off in Paris, France. CARTES is the world leading show for banking technologies & eTransactions & this year they are giving special attention to mobile & contactless payment solutions. This year’s event should be quite exciting for all involved given the high number of mobile & contactless payment solutions that have deployed in many countries & that went into prototype here in the United States.

We’ve been following the contactless payment industry for almost two years now & we continue to see an abundance of new contactless solutions develop. Combine contactless solutions to what has emerged in the mobile space these past 18-months with the introduction of smart phones such as Apple’s iPhone & I can assure you that contactless mobile solutions are closer in sight than many predicted.

Just last month, Juniper Research published a study titled, “Mobile Payment Markets: Contactless NFC 2008-2013”. Key points from this report include:

– By 2013, the global mobile subscribers with NFC phones will reach 700 million
– FeliCa-enabled phones riding on Japan’s NTT DoCoMo, KDDI, & SoftBank’s network dominate this market. Juniper estimates that roughly 50 million FeliCa NFC enabled phones have shipped to date.
– Juniper predicts that North America, Western Europe, & the Far East & China will be the dominate regions by 2013.

This Juniper study also reiterated some of my own concerns about the roadblocks that currently exist in this Near Field Communications (NFC) mobile market. The first & most obvious concern stated by Juniper was the lack of NFC phones on the market. The report also pointed to the lack of NFC readers installed at merchant locations as the second roadblock. An additional concern that I have is that consumers & merchants have yet to be properly educated on how NFC works. I dialogue with a number of smart & tech savvy people each day & I’ve realized that NFC is still an unknown technology. To my surprise, some of the people I dialogue with aren’t even familiar with the term NFC.

Hence the reason I am so delighted when I read reports that indicate that NFC trials here in the U.S. continue to show progress. One of the best examples & one that got a lot of attention was the NFC trial conducted with riders of the Bay Area Rapid Transit District (BART) in San Francisco. For four months (January 28 – May 30, 2008), BART riders were provided NFC equipped phones to pay for their transportation costs. These same NFC enabled phones allowed participants taking part in the trial to make payments at participating Jack in the Box restaurants & to download directions from NFC enabled posters inside BART terminals. Full results from the NFC trial with BART can be viewed in this Yahoo Finance article.

As more NFC trials are conducted here in the U.S., NFC will gain adoption by consumers. Retailers are already beginning to acknowledge the benefits associated with NFC payments & are favoring them over traditional Point of Sale (POS) swipe solutions.

I suspect as next week’s CARTES & IDentification show gets underway, we will see a growing number of devices & articles pointing to the market that exists for contactless mobile payment solutions.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Mobile Phones offer More Than Just Voice

Almost every day someone presents a new idea or use for mobile phones. The size of the mobile market has become so vast that it is increasingly more difficult to identify those mobile business ideas that will work & those that won’t. In the last 12 months the mobile space has opened up new business verticals that few would have ever imagined.

The mobile space is still relatively young. It was only 25 years ago (October 13, 1983) yesterday that Bob Barnett, President of Ameritech Mobile Communications (what is now AT&T Inc. & Verizon Wireless), made the nation’s first commercial cell phone connection from Chicago’s Soldier Field.

When Barnett made that first commercial cell phone connection he used a Motorola DynaTAC handset that weighed 2 1/2 pounds & retailed for $3,995 USD. Fast forward to 2008 when most mobile phones weigh less than 1/2 a pound, they retail for around $50 USD, & even the most basic mobile phones offer address books, calendars, games, text messaging, music players, & cameras.

Just three weeks ago I read an article in the Canadian Press describing how a new Japanese mobile phone built by Sharp Corp. will be used in place of a traditional car key. This new phone uses a technology developed by Nissan Motor Co. called “Intelligent Key”. As reported by the Canadian Press, “Cars equipped with the system sense when the correct key is nearby, automatically unlocking their car doors, and allow the engine to be started once the key is brought inside the car. Nissan said it has shipped about a million cars with the technology in Japan since 2002.” NTT DoCoMo Inc., Japan’s largest mobile operator, will provide the mobile network that this new service will run on.

It isn’t a surprise to me that a Japanese company is the first to introduce this type of technology. The mobile phones available in Japan are some of the most sophisticated in the world. Most of the mobile phones you will find in Japan come standard with digital TV, music players, Global Positioning Service (GPS), & cameras that double as barcode scanners & wireless credit cards.

The mobile phone is no longer a device for business men & women or the elite. The mobile phone has become a ubiquitous device for all income levels & demographics around the world.

Today, the mobile industry is nearly a $150-billion-a-year industry. As data speeds continue to increase & mCommerce solutions gain popularity the mobile industry will only continue to grow.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Contactless & Mobile Technologies at the Presidential National Conventions

Last week’s Democratic National Convention (DNC) was interlaced with contactless & mobile technology from beginning to end.

First Data kicked the convention off by introducing their new GO-Tag; an innovative electronic sensor that is small enough to transform any device into a contactless payment solution. The GO-Tag which was distributed in the form of a small button at the DNC allowed the 5,000 lucky journalists & delegates who received them the ability to “purchase” free snacks & drinks by tapping their GO-Tag button on electronic sensors at concession stands installed throughout Denver’s Pepsi Center. In a recent BusinessWeek article, Michael Capellas, First Data’s CEO, is placing a major bet on the fast-emerging world of mobile electronic commerce. According to the article, the GO-Tag project is one of five new ventures that Capellas has launched since he took over First Data. The other four projects include information analysis, customer-loyalty programs, fraud detection, & consumer-behavior prediction. The article went on to say that Capellas believes that mobile commerce could add more than a $100 million to First Data’s revenues in 2009.

Then there was Senator Barack Obama who announced Joe Biden as his vice-presidential pick with a text message. Nielsen Mobile described this text message based ad campaign as “the single largest mobile marketing event in the U.S., to date.” Nielsen estimates that 2.9 million U.S. mobile phone subscribers received the text message launched by Obama’s campaign. Obama supporters can still sign-up for future text messages from Obama’s campaign by texting “GO” to short code 62262 (spells OBAMA). Supporters can even subscribe to specific types of information updates by texting specific keywords such as “HEALTH”, “EDUCATION”, etc. For more information about Obama’s mobile campaign you can visit Obama’s web site & while you are there you can even download wallpapers & ring tones for your mobile phone too.

Delegates attending both the Democratic & Republican National Convention also made good use of their mobile phones for communicating events from the convention. They sent & are continuing to send text messages to services such as Twitter which in-turn distributes these messages from the convention to their “followers”. These same people are also shooting short video, audio, & taking pictures with their mobile phones & then uploading them to their blogs as mobile blog entries (“moblogs” for short).

These are just a handful of examples on how contactless & mobile technologies are being used in larger scale mediums such as our current presidential election & more importantly these two technologies are increasingly becoming a part of our everyday landscape.

Location Based Advertising (LBA)

A wonderful article by Christopher Breen of Macworld.com pointed to how the 3G iPhone is sure to change the way in which retailers market & we consumers choose where we eat & shop. As stated previously, I was quite disappointed that the 3G iPhone will not include support for Near Field Communications (NFC). However, with the combination of 3G & GPS you’ve still got something pretty special.

The idea of walking down the street past a store & a coupon for example appearing on your phone from the very store you are walking past is so much more a reality than it ever has been. If there isn’t a name for this type of marketing might I suggest Location Based Advertising (LBA).

Take this example a step further & imagine the coupon that was just zapped to your phone is of interest to you. You choose to redeem the coupon from your phone which leads you to a purchasing page. You select & pay for you item all through your phone. You now walk into the store to pick up the item you just purchased.

For some, this example may scare you & for others I’m sure you’d like nothing more than to be able to purchase everything from your phone. Imagine the time this approach will save you & the convenience factor. And for retailers the potential to market to consumers who can take immediate action is priceless.