[Dave Birch] I’ve been looking at some NFC-related business cases for customers in different countries and noticing — without giving away anything confidential — how different they are: some are focussed on retail, some on transit, some on operators etc. Yet they are all founded on what I think is a reasonable consensus on the narrative to date: that is, customers like NFC (a lot), operators aren’t sure how to cash in and banks aren’t sure whether the operators are on their side or not. One thing they all agree on though is that handset availability shapes the critical path. This is because it seems highly unlikely that consumers will hammer down the doors of mobile phone shops to get NFC handsets to use for boring things like payments. Once they have the handsets I’m sure they will use them for payments, but payments isn’t interesting enough to drive them down to the mall. What consumers will want NFC for is the simple stuff — smart posters, exchanging numbers, that sort of thing — and (in certain urban markets) for transit.

Yet while some commentators (eg, me) bemoan the lack of handsets — largely a reflection of the convoluted standardisation process around the location of the "secure element" in the mobile handset (ie, on the SIM or not) — there are big banks out there who are making big bets…


Citigroup Inc. has an NFC mobile phone under development that it plans to brand with the Citi logo according to a lab report filed with the U.S. Federal Communications Commission. The report clearly shows the Citi logo on the front of the tiny handset. Citi has been rumored to be considering issuing or distributing a branded phone to customers.


Frankly, I’m not sure if I believe this to be the winning strategy, but I’m not an expert on Citi’s markets and I’m sure they are. Personally, I don’t want a Barclays phone: I want my Barclaycard OnePulse to be loaded to whichever phone takes my fancy (I’m currently very happy with my N82, thanks). It seems to me further confirmation that the move to NFC is gathering momentum despite the natural reaction to early hype. Yes, there won’t be as many handsets out there as quickly as people hoped, but still as James van Dyke of Javelin Strategy put it


[I] find myself wondering how long it will be before we all start to turn in our personal carrion-enclosed container o’ credit, debit and identification cards for a chip-enabled mobile payment device.

[From Javelin Strategy and Research » When too tired to be coherent, use props]

One critical input to current thinking is the extent to which corporate strategies toward contactless technologies, particularly in the retail sector, are shaped by the longer-term strategies around mobile. As recent survey by First Data appears to confirm the extent to which this is a growing component in decision-making:


New company research presented by Wendy Humphrey, First Data’s vice president of enterprise payments, asked merchants to cite the benefits of accepting contactless payments. Fifty-one (51) percent of merchants said faster checkout and increased throughput at the point-of-sale (POS), 46 percent said the ability to support customer preference for the contactless payment option, and 25 percent said being ready for future payment solutions (like NFC).

[From Finextra: Contactless transit uptake paves way for mass-market NFC mobile payments – Smart Card Alliance]

A year ago, mobile wouldn’t have been a consideration in in banks and retailers contactless strategies (well, unless they read this blog of course) and the focus would have been on the speed and convenience. But retailers and banks alike are beginning to see that business models (there we go again) based on new revenues for new services wrapped around payments are much more attractive than business models that use expensive mobile phones to emulate one euro contactless stickers. And there’s no getting away from the numbers. It’s hardly worth reciting the key statistics here, as everyone is bored with hearing about how mobile (not the web) is the key to the future of payments, but here we go anyway…


Three times as many people actively use SMS text messaging worldwide than use email. There are nearly four times as many mobile phones – at 3.5 Billion cellphone subscriptions – than there are personal computers. The cellphone is permanently carried (the laptop is not); the cellphone is personal; it is always on; it has a built-in payment system (imagine if all web users also had Paypal accounts); it is available at the point of inspiration, and delivers nearly 10x more accurate audience data than the web.


The Americans who think about the digital divide, need to know that the world’s most prevalent digital platform is not the internet, it is cellphones. Even in the USA from last year, more people owned cellphones than had internet access. In many countries the majority of internet access is from cellphones, including some of the world most technically advanced nations, such as Japan and South Korea, to some of the most backward, such as India and Africa.

[From Communities Dominate Brands: American Marketing Professionals Unsure about Digital – findings from Peppercom and PR News]

Retail e-payment strategy is, in the long run, mobile payment strategy which is, in the short run, contactless payment strategy. Discuss…

I’ll be going into this sort of thing in much more detail in the workshop I’m running at SMi’s excellent Contactless Cards & Payments conference in London 23rd-25th June 2008. I had a really good time running a workshop at the same event last year and, judging by the kind e-mails I received, so did at least one or two of the delegates. Because the people at SMI are both gentlepersons and scholars, they have kindly agreed to give a complimentary delegate place (worth an astounding ONE THOUSAND TWO HUNDRED AND NINETY NINE pounds Sterling — plus VAT) to the first person to respond on this thread with the name of the infamous American murderer who has the distinction of being the first person in history to be brought to justice by the miracle of wireless communications.

In the traditional fashion, this competition is open to all except for employees of Consult Hyperion and members of my immediate family. The prize must be claimed within one month. 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]


  1. http://www.finextra.com/fullstory.asp?id=18281
    the article supports your choice,in a different way.
    Of course AMEX story has also additional parameters to end that pogramme, but at the end of the day,
    it looks like phones will be the only non-card form that consumers would like to have.
    Even though, US market are using online version and they do not need to update the offline parameters, keyfobs will be out of market.
    I guess that end is waiting for us too, unless we will find a way to update the card thru reader interface.
    In additon to technical aspects;
    this (this = contacless) is also very much related to perception of the bank/payment feature in people’s minds. Payments are related to the cards and new form could mismatch with that concept.
    Phones are the best candidates, in terms of consumers choice, technical issues. But there is still a long way to go in terms of debate between GSM & Banking industry.

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