Mobile Contactless Payments Gain Momentum

October 28, 2008

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

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Mobile Phones offer More Than Just Voice

October 15, 2008

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