[Dave Birch] We’ve all been a bit fed up with NFC recently, having got carried away on a tide of hype that didn’t take into account the complexity of the relationship between banks, operators and manufacturers. This relationship does not seem to have advanced much in last year: the operators want a business case before they order handsets, the manufacturers want commitment before they invest in handset production, the banks can’t see an opportunity without handsets. So no NFC>

As my colleague Neil Livingston pointed out in his workshop at NFC World in Singapore, there are actually a range of practical uses for NFC, beyond payments, where there do seem to be business cases and it was interesting to me that much more of the discussion at NFC World today in Singapore was about consumer electronics opportunities rather than just about mobile-related opportunities. So there are no handsets, but that doesn’t mean there are no NFC opportunities. Nevertheless, we have to be realistic. It hasn’t taken off the way that many had hoped. It’s not because of the consumer proposition. The fact is, however, that in all of the pilots and trials to date, the response of consumers has been overwhelmingly positive. They like NFC. So the fact that some stakeholders have been unable to agree a basis for moving forwards in the co-operative world of “apartment” USIMs, shared TSMs and revenue sharing (GSMA model) is, I think, unlikely to put the brakes on NFC completely.

The lack of handsets has stimulated other developments. As the Juniper white paper notes, right now there are two leading candidates to bypass the mobile operators and handset manufacturers in order to deliver functional NFC services: these are NFC stickers and microSD cards with built-in NFC interfaces. Certainly at NFC World there was plenty of talk about stickers. I’ve always been a fan…

Most importantly, it’s a simple and inexpensive way of piggybacking on the mobile without have to actually integrate anything into the phone, which I predict will bring some new and innovative solutions into the space.

[From Digital Money Forum: Stickers are the future, I’m telling you]

As I anticipated, stickers are pushing innovation and many of the delegates I bumped into were looking at new businesses in this area, but not everyone is as enthusiastic. The reason for my enthusiasm is that the simple ecosystem around stickers means that they can be quick to market and start building consumer, merchant and service provider enthusiasm for NFC solutions.

In the meantime, intermediate steps, such as a contactless sticker which can be affixed to cell phones, may have to do. Again, that would only apply to payments, treating the phone just like a contactless credit or debit card.

[From NFCNews | Economy, standards stand in the way of NFC]

Visa and MasterCard have already started to experiment with the stickers both as alternatives and complements to “traditional” cards. An interesting example is the First Data “Go Tag” range that delivers a pre-paid card to customers in a blister pack that has a sticker included. The sticker and the card both link to the same pre-paid account, giving customers additional convenience.

[First Data Corp] also has struck a deal with Visa Inc. to expand merchant acceptance of these contactless stickers, which can be attached to mobile handsets or other devices for use at the point of sale. MasterCard Inc. announced last month that it had a similar alliance with Blaze Mobile Inc. of Alameda, Calif., which also makes contactless stickers.

[From Turning to Stickers to Win Adherents to Mobile Payment – 04.17.2009 – American Banker Article]

Here in Singapore, Forum friend Aneace Haddad has just launched a new company, Taggo, to provide loyalty schemes to retailers using an NFC stickers designed to go on consumers’ phones. And he’s not the only one linking stickers and loyalty to kick off. A question that came up in our workshop at NFC World was why companies are turning to contactless solutions for these applications rather than simple barcodes or magnetic stripe cards.

Gruman said RFID offers numerous advantages over such traditional options, including customer convenience (“It’s easier to get a read on a chip than it is to pull out a card from your wallet.”); security (“We think we’re more secure than mag stripe by a long shot.”); and consolidated functionality (“In addition to being a loyalty piece, the chip can also be linked to a credit card, a debit card, and store credit.”).”

[From RFID Update for Tuesday, March 31st]

This last point, about consolidated functionality, is key. On the banking side of things, this requires some new thinking. In the early days of EMV, there was much talk about multi-application. The idea was that since an EMV card is a computer, albeit a very small one, then it could run other applications in addition to the EMV payment application. In practice, very few multi-application payments cards were ever issued — the Sky MasterCard, the original US Amex Blue card and a small number of others — and multi-application fell by the wayside (although to be fair, one of the key characteristics of multi-application card, post-issuance application management, is having a comeback because of NFC and mobile phones). The candidates for co-located applications (eg, loyalty schemes) never quite had the necessary leverage to get issuing banks to spend the additional dollar per card. Contactless, it seems to me, opens up potential for different kinds of co-located application with far more leverage. Mass transit is an obvious application and already live with products such as the Barclays OnePulse in Lodnon, but if I had to pick one out of left field for 2010 it would be access control. U.S. Bank has already begun a pilot in this area, combining both technologies: stickers and multi-application…

U.S. Bank is looking at the next best thing, which turns out to be a contactless sticker that can be affixed to a cell phone. “We have an internal pilot involving U.S. Bank employees with a Visa debit card on a sticker,” says Venturo.

[From ContactlessNews | Testing the limits of new banking technology]

The cards contain an INSIDE Contactless chip which powers both the Visa payWave and the HID iCLASS applications on the card. HID also provided the access control readers for the pilot. The idea of using a single card to buy a cup of coffee on the way to work, open the door to get in to the office and (next step) log on to the corporate intranet seems very attractive to me and a powerful anti-churn play for issuers.

In all honesty, though, I have to finish by re-iterating another factor that impacts many of our customers. Stickers are not just about technology, fashion, innovation: they are also a manifest instance of the power struggle that is going on between service providers (eg, banks), handset manufacturers and mobile operators which may be acute around NFC but extends across a good fraction of the future payments landscape.

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. Many good points in your article. What is the solution? Is there an appropriate business model that incents and rewards all parties in the ecosystem? Is the TSM the silver bullet here? If so, what is the revenue model? Will card issuers pay a TSM $5-10 per card account downloaded into the SIM card? If so, is that enough to cover the TSM’s cost and share a signficant portion with the mobile operator? Or will the TSM and/or mobile operator demand a share of the interchange? Interested in people’s thoughts.

  2. Dave,
    Good post. Liked your analysis of NFC stickers helping bridge to the sunny world where banks and telcos play nice with each other.
    In the context of stickers and kick-starting NFC deployment, do you see a role for user-entered credentials? For e.g., Consumer Ann get a sticker from FirstData or Blaze, and can enter the loyalty cards in their wallet without having a merchant (or a TSM as a proxy) provision them in? Alternatively, do you envision the only way credentials getting into NFC stickers/chips is thru’ secure provisioning?

  3. Quick responses:
    1. I cannot see any possibility of issuers sharing interchange income except for co-brands, so TSM income will have to come from provisioning and management
    2. I’m of the general opinion that some secure infrastructure will be need to make the most of stickers in the mass market but there will be entry plays that can have user-entered data.

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