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    GSMA calls for mass market NFC handsets by mid-2009

    The mobile industry association has finalised its device requirements for NFC handsets and called on manufacturers to put phones incorporating the Single Wire Protocol interface into consumers’ hands by the middle of next year.

    WE WANT IT NOW! The GSMA wants all new mobiles NFC enabled from next year

    WE WANT IT NOW! The GSMA wants all new mobiles NFC enabled from next year

    The GSMA, the global trade group for the mobile industry, has called for full NFC functionality — including the standardised ‘single wire protocol’ interface — to be built into commercially available mobile handsets from mid-2009.

    At a meeting in Macau this week, timed to coincide with the organisation’s Mobile Asia Congress, the association’s board came out in full support of the ETSI-endorsed Single Wire Protocol (SWP) standard as the best way of providing the interface between a handset’s Universal Integrated Circuit Card (UICC or, more commonly, SIM) and the embedded NFC chipset within the handset.

    The endorsement follows a series of trials involving nine mobile operators that have been taking place in eight different countries (Australia, Canada, France, Japan, Korea, Malaysia, Taiwan, Turkey and the US) under the GSMA’s UICC-based Pay-Buy-Mobile banner. Further pilots are planned across 14 countries by 15 mobile operators.

    The move comes after the GSMA issued a detailed device requirement document to a wide range of vendors and suppliers in July. The association says 37 key players responded, giving a clear picture of the core requirements for any SWP/NFC device.

    “There is no doubt that there is a huge latent demand for a large variety of mobile transaction services, of which there is universal interest in proximity payments, as trials across the world have already shown,” says Rob Conway, the organisation’s chief executive. “We are committed to ensuring that mobile payment services are delivered as efficiently and cost effectively as possible. But this will require device manufacturers to make sure that the vast majority of commercially available handsets incorporate the Single Wire Protocol and Near Field Communications features as standard.”

    “Doing so would enable the industry to leverage significant economies of scale and ensure greater accessibility of NFC services for mobile users,” he added.

    “This call for handsets is supported by recent operator trial results which indicate a growing consumer demand for mobile payment services,” says the GSMA:

    In Taiwan, in a trial of over 200 users, FarEasTone found that 90% of people felt positive toward to this new service. 80% of people were satisfied that the service is secure, and 40% said they would switch their monthly spending to a mobile credit card service.

    Seven banks and four mobile operators — including Orange and SFR — involved in the “Payez Mobile” trial in France have announced the results of trials conducted with almost 500 sales outlets and nearly 1000 triallists. Over 90% of triallists said they found contactless mobile payment convenient, fast, and easy to use. In addition, 94% declared that they would recommend it to their friends and family. Merchants welcomed the possibility of offering to their customers an innovative payment solution, with over 80% saying they appreciated the speed and cutting-edge appeal of mobile contactless payment.

    Equally, in Korea, SKT and KTF found that m-transportation was very popular with users, and this is likely to translate to other mobile payment services. Approximately 450,000 users of the “T-money” service were quick to adopt the service as it is convenient and compatible with existing readers. According to KTF’s survey, 85% of m-transportation users indicated satisfaction levels were ‘very high’. 85% of them believe that using a contactless mobile phone is much more convenient than getting their wallet out to use public transportation, and would continue to use the mobile service. “T-money” attracts users not only for the public metro and bus, but also for small transactions such as buying goods from convenient stores by simply tapping on the contactless readers.

    Both MasterCard and Visa are supporting the trials with their PayPass and PayWave contactless payments services and, in September 2008, the GSMA signed a memorandum of understanding to share information withEMVCo, the international payments organisation operated by JCB International, MasterCard and Visa.

    On the handset front, Nokia already has a commercially available NFC-enabled phone in the form of the 6131 NFC and LG has just released a prototype, the KU380-NFC. Motorola, Sagem and Samsung are also developing phones for NFC-enabled mobile payment services, the GSMA says.

    “Gemalto, G&D and KEBT are among the UICC card suppliers supporting NFC-enabled mobile payment services,” says the GSMA, and “Vivotech and Harex are among the companies developing NFC-enabled readers that support NFC-enabled mobile payment services.”

    Senior representatives of mobile operators around the world have stepped up to the plate to add their individual endorsements to the GSMA’s call for handsets:

    “As one of the first operators to trial mobile payments, we’ve seen first-hand the willingness of consumers to adapt to this new payment channel which is very much dependent on the availability of NFC handsets and the associated ecosystem,” says Kris Rinne, senior vice president of architecture and planning at AT&T. “We hope that the GSMA’s delivery of a consolidated set of minimum requirements will accelerate the worldwide delivery of NFC-enabled handsets to the market.”

    “We observed great potential for mobile payment services through T-money. We believe it is changing the behaviour of users and expect it to see significantly increasing demand over time. Supportive actions and collaborations with banks and especially handset vendors will help to speed up this demand,” added Sang Ryul Lee, VP of the Transaction Business Group at KTF.

    “Orange has run trials in France, Spain and the UK which show a consistent appeal to consumers in all countries for SIM-based, operator managed, mobile NFC services,” commented Mung-Ki Woo, VP of payment and contactless at Orange. “For Orange, mass deployment is now mainly dependent on handset manufacturers providing a large range of adequate handsets.”

    “As Malaysia’s leading mobile operator, Maxis is very enthusiastic about enabling mobile payments via NFC and leveraging the growing contact-less payment infrastructure in Malaysia,” says Dr Nikolai Dobberstein, head of products and new businesses at Maxis Communications. “We are collaborating with strong partners on this initiative, Maybank and Visa International, and our focus is to establish a mobile NFC eco-system for commercialization which provides Malaysian customers with accessible & easy to use mobile payments.”

    “We are pleased to be part of this pioneering and innovative project trial as it will further simplify payment transactions and in the long run, help spur the growth of mobile commerce our country. Meanwhile, we are anticipating that vendors will incorporate NFC functionalities as a default feature in their handsets so more people can enjoy the technology,” said Napoleon L Nazareno, president and CEO of Smart Communications in the Philippines.

    “Telstra recently conducted a contactless mobile payments pilot with Australia’s National Australia Bank and Visa and early results from the trial are positive,” added Telstra’s Ross Fielding. “Findings from an online survey of participants in the pilot found a high propensity to use the service and further advocate its benefits to friends and family.”

    And Cenk Serdar, chief VAS officer at Turkcell, commented: “We see potential in the market for NFC based mobile payment services, which can both be seen from our customers and banks’ feedbacks. We believe that the customers may gradually adapt our services once the supporting handsets are on the market.”

    The full list of mobile operators taking part in the Pay Buy Mobile initiative also includes Brasil Telecom, Celcom, Chunghwa Telecom, CMCC, EITC, Etisalat, Far Eastone, GlobeTel, IMC Island, Kall, KPN, MCI, Meteor, Mobicom, MobilKom Austria, Mobitel d. d., MTN, MTS, NTT DoCoMo, Partner, Pelephone, Rogers Wireless, SFR, SingTel, SingTel Optus, SK Telecom, Softbank Mobile, Starhub, Swisscom, TDC, Telecom Italia, Telefonica O2, Telenor, TeliaSonera, Vimpelcom, Vodafone, Wind and Zain.

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