Abstract
Plagued by unresolved technical and business issues, the global NFC market has
been moving slowing over the past several years. The finalization of the NFC
implementation standards, together with other technical issues, took much
longer than people had expected, largely due to the business struggles between
different industry groups. The global economic crisis started in 2007 also
slowed down the industry' s effort to come up with a workable solution
acceptable to different parties in the ecosystem.
Even so, significant progresses are made on the technology front over the past
two years. As NFC standards were finalized when the Single Wire Protocol (SWP)
was adopted by ETSI in 2008, manufacturers of NFC chips, SIM cards, and
handsets are finally able to move forward in developing the new generation of
NFC solutions. But viable business model remains elusive and no major
commercial roll-outs have been announced.
"NFC has come a long way. And different industry groups recently made some
encouraging progress in finalizing the technical standard issues for mass
production. But mobile operators and financial institutions are running out of
patience as the market drags on and major commercial roll-outs worldwide not
expected until 2012." Terry Xie, Director of Mercator Advisory Group' s
International Advisory Service and principal analyst on the report, comments.
"Though NFC solutions are still considered the best long-term solutions for
offering proximity mobile payment and other services, some industry players
are seriously considering other options that allow them to move quickly in the
market with some simpler technology and less business issues to resolve. The
next two years will be very important for kick starting market initiatives in
proximity mobile services. And various vendors are working hard to offer
different innovative solutions."
Mercator Advisory Group' s International Advisory Service (IAS) covers this much discussed indsutry topic in two reports:
- How Close Is Proximity? Part I: NFC Proximity Mobile Payments in 2009
- How Close Is Proximity? Part II: Alternative Proximity Mobile Payments in
2009
This first of two reports explores main technology issues that have delayed
the finalization of the NFC standards and the business reasons behind them.
Then it provides an overview of recent progress in the technical standards,
especially the Single Wire Protocol (SWP) and its implications for the
evolution of proximity mobile payment systems. The report also looks at the
latest developments in the manufacturing of NFC chip/handset/SIM compliance
with the latest standards, as well as in the testing and deployment of NFC
proximity mobile payments in country markets around the world.
Highlights of thi report include:
- After a delay longer than many had expected, the NFC standards are finally
agreed upon, paving the road for large-scale manufacturing of NFC handsets.
- MNOs and FIs have yet to find final solutions to their disagreements on
business models. But encouraging signs suggest that mobile operators might be
willing to settle for a SIM-rental fee instead of a transaction fee.
- Tremendous work still needs to be done to resolve remaining issues before
mass deployment of NFC-proximity mobile payments. Mercator believes that
significant commercial roll-out worldwide won' t happen until 2012, though some
markets will move faster than others.
- A wide variety of NFC trials were underway in 2009, most in single
national markets, as stakeholders cooperated to resolve their differences and
test new applications.
- Critical issues remain for FIs to resolve, including a means for
influencing their applications' placement in the mobile "wallet," as well as
setting the rules governing the certification of payment applications.
One of the 2 Exhibits included in this report:
This report contains 26 pages and 2 exhibits.
Companies covered in this report series include: Watch Data, Bladox, Zenius
Solutions , TWINLINX, Tyfone, DeviceFidelity, INSIDE Contactless, NXP, Sagem
Orga, Motorola, Sony, Nokia, Apple, Research In Motion, Fonelabs, Visa,
MasterCard, First Data, NationZ, and China Mobile, among others.
Table of Contents
TABLE OF FIGURES & TABLES
Introduction
I. NFC and Contactless
- A. Introduction To NFC
- B. Lack of Progress in NFC Payments
- C. Business Struggles Spill Over To Technology Decisions
- Backgrounder: SWP And Why It Matters
II. Recent Developments World-Wide
- A. Industries Moving Forward
- B. A Glimpse At Recent Pilots/Deployments
- C. Acceptance NFC Is Enjoying A Free Ride
III. Conclusion and Observations
- A. Summary
- B. Observations
