[Mike Burden] In Paris last week at the conference on “Cartes a puce et Transport” (ie, smart cards in transport) there were a number of presentations about NFC. It really is beginning to dominate the technology roadmap, despite the fact that there are no handsets out there, that no-one seems to know what the business model might be, mobile operators and service providers can’t agree on architecture and most of the public have never heard of it. There is a definite “X factor” here: once you’ve used an NFC phone to pay for a coffee and jump on a train (even if it’s just at a demo booth at an exhibition) you can see why it’s getting so much attention.

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The case study on East Japan Railway was well worth listening to. In their business model, ALL mobile phones ship with contactless interfaces that can be used for the “Suica” transit application in the phone. There are currently 17 million Suica card holders and East Japan Railway are expecting one million Suica phone “card holders” by the end of this year. They seemed to think that phones are a straightforward evolution from their existing contactless system. As in the case of Octopus in Hong Kong, they are anticipating usage well beyond transit: the convenience stores in and around stations, fast food chains, vending machines and even campus solutions for universities and amusement parks.

Nokia were there presenting on their proposed JV with G&D to provide a trusted service for over-the-air (OTA) provisioning of transit applications for NFC phones. The transit operators haven’t spend as long thinking about the business model issues here as banks have, but it is already clear there’s going to be a debate. There were a lot of questions from the floor about security: how the applications (especially payment applications) would be transported securely to the third party service and there on to the customer’s handset.

NXP (Phillips Semiconductors as was) said that the recent ABI predictions (that a third of phones shipped in 2010 will have NFC) were in line with their own expectations.

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