Blue on the Danube

[Dave Birch] PaymentsNews picked up on my podcast with a large Dutch retailer, talking about their experiences with NFC payment.

The trial went beautifully – what’s not to like about 98% positive customer satisfaction? But, the reality is that moving from pilot to production deployment is stalled – because the mobile operators, handset suppliers, and banks can’t agree among themselves how to bring NFC mobile payments to market. Mierlo works for a major retailer who’s itching to deploy NFC – but can’t.

[From Payments News: NFC Mobile Payments – Beautiful Says Dutch Retailer! – September 16, 2008]

Something’s not working properly in the world of NFC. Consumers like it, retailers like it, consultants adore it. Yet nothing much seems to be happening. Why is this? The most common theory is that the NFC value chain is too complex and involves organisations learning to work together anew.

NFC’s prospects have been hampered by conflicts of interest from operators, handset manufacturers and banks and payment processing companies, added Bonny Joy, another analyst in charge of wireless device strategies.

[From NFC needs better industry work, says report]

I’m sure this is true. It’s very frustrating. But what do to? Well, some people are getting so fed up waiting for the operators and handset manufacturers to get their act together that they’re just bypassing them by putting stickers containing NFC chips and antennas on the back of phones. This appears to be an evolving meme: it’s not longer just me who thinks that stickers are going to be big.

Until now most discussions about NFC have revolved around downloadable applications, embedded chips, and carriers. However, the recent buzz is about finding alternatives and the most prominent is the use of an NFC chip that can be affixed to the outside of the handset (i.e. an NFC sticker.)

[From Mobile Banking: Recap from Mobile Commerce Summit – Part 3]

You may remember the Garanti bank case study, where the Turkish bank started issuing stickers after it had already begun issuing contactless cards.

Why did they do this? Well, Mehmet Seazgin, the head of payment systems at Garanti Bank sets the tactic in context: “Since we came up with this sticker idea, which works with all operators and brands of handsets, that gave us a whole new negotiation power with the network operators.” The negotiation that he is referring to is about NFC.

[From Digital Money Forum: Turkish delights]

I expect to see the more banks ordering stickers (we’ve just ordered some for a pilot with one of our bank customers in the Middle East) over the coming months while the operators and handsets manufacturers set their gears to slowly mesh together and start pushing handsets out into the mass market.

I hope I’ve not got you too depressed about the prospects for NFC. The overwhelmingly positive consumer reaction will pull it into the marketplace even if it is via stickers on mobile phones rather than integrated propositions to begin with. I’ll test this theory out on the banks of the Danube in a few weeks’ time. I’ve thoroughly enjoyed IIR’s Mobile Payment Strategies events of the last couple of years, so I’m sure that Mobile and NFC Payment Strategies in Budapest on 24th-27th November 2008 is going to be an excellent event again and I’m really looking forward to speaking at it. Once again demonstrating their magnificent commitment to education and enlightenment, the wonderful people at IIR have given me a three-day delegate pass for this event — worth an astounding TWO THOUSAND EIGHT HUNDRED AND NINETY FIVE EUROS plus VAT — to give away on this blog as a competition prize. So if you are going to be in Budapest on those dates and you’d like to come along to hear some of the leaders in the field discussing the direction of mobile & NFC payments world, then all you have to do is be the first person to respond to this post with the name of the people who used to call Budapest “Ak-Ink”.

In the traditional fashion, this competition is open to all except for employees of Consult Hyperion and members of my immediate family, is void where prohibited and is does not discriminate on the basis of religion, gender or sexual orientation. 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.

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