[Dave Birch] Opinion is divided as to viable business models for mobile payments, as it has been for some time. One key issue is, as is well understood, the extent to which operators and banks come to a “settlement” over the cost and benefits of NFC bearing in mind that the operator’s big picture is about more than payments. As Diamond put it in their report on business models in the U.S. market,

[mobile operators] will need to play an active role in developing an m-payments value chain to ensure that they capture a fair share of revenue from a payments market sized at $8 trillion in 2009 thereby further monetizing their investments in customer acquisition and retention, and justifying the cost of higher handset subsidies.

But there’s a fine line between capturing a “fair share” and stopping a new market from developing. If the mobile proximity payments market is to develop, then surely any attempt by the mobile operators to recover the full cost of NFC deployment from transaction fees (which, from their point of view, means no risk) will simply mean that the transactions will never happen because they will be priced out of reach.

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This is just the sort of issue that I expect to see addressed at Informa’s excellent Mobile Payments conference to be held on March 12th-14th in Amsterdam. I’ll be chairing on 13th March as well as presenting on the subject of NFC security on 14th. There will be plenty of expert speakers there to ensure that all aspects of mobile payments are covered with real depth and I’m really looking forward to it, both to hear some new perspectives and to catch up with old friends. What’s more, the wonderful, wonderful people at Informa have kindly agreed to let me offer a three day delegate pass to this event — worth an amazing ONE THOUSAND EIGHT HUNDRED AND NINETY NINE of your English pounds (plus VAT) — as the first blog prize of 2008. So here we go: if you would like to win this super prize, all you have to do is be the first person to reply to this thread with the modern name of the well-known island that the Dutch ceded to England in the Treaty of Breda in 1667.

In the traditional fashion, this competition is open to all except for employees of Consult Hyperion and members of my immediate family. Oh, and no-one can win more than one of the Digital Money Blog prizes per calendar year.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

5 comments

  1. Off the topic a bit but…I have noticed a few talks on contactless security at industry conferences in recent times. Obviously the press creates a fuss about “RFID” security ever so often and there are also a few opinions in the academic community. It would, however, be interesting to get the industry’s view on possible security challenges in the contactless environment. Do they have concerns specific to the technology, or is the security pretty much the same as for contact payments? Any good sources available on this topic?

  2. The approach that I’m taking for my presentation is to look at three aspects: generic vulnerabilities of 14443/NFC, specific risks around payments and then vulnerabilities of mobile implementation. I try to fit these into a risk analysis framework to show that the “RFID” headlines might not be the best guide to security strategy.

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