Mobile Proximity Payments: scenarios for market development

0. Summary

1. Mobile proximity payments can create valuable revenue opportunities

• 1.1 NFC has the potential to unlock new revenue streams and communication channels with the customer
• 1.2 NFC can have a wide range of market-based applications
• 1.3 NFC has the most potential when it is integrated with mobile devices
• 1.4 The NFC market is complex, but offers clear benefits to the many stakeholders
• 1.5 Standardisation is critical to mass-market adoption

2. Initiatives in southern Asia demonstrate the potential for NFC

• 2.1 The MNO-driven model: NTT DoCoMo' s Osaifu-Keitai
• 2.2 The collaborative model: SK Telecom' s Moneta
• 2.3 The financial-services-dominated model: Visa' s mobile payment trials in Malaysia
• 2.4 The third-party-controlled model: the Octopus card in Hong Kong
• 2.5 Outside Asia, contactless payment initiatives are paving the way for NFC mobile payment services

3. Drivers, barriers and key success factors

• 3.1 There is no single path to NFC adoption
• 3.2 Opportunities will vary between markets
• 3.3 Initial market development tends to follow an identifiable pattern
• 3.4 MNOs should recognise that financial institutions pose a threat and early collaboration is a key strategy
• 3.5 NFC could eventually link the mobile phone into the wider potential RFID market
• 3.6 The time is right to develop and execute an NFC strategy

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• Table 0.1: SWOT analysis of mobile NFC
• Table 1.1: SWOT analysts of mobile NFC
• Table 1.2: Potential benefits of participating in the NFC market
• Figure 1.1: Key events in the standardisation of mobile NFC technology, 1Q 2004 - 3Q 2008
• Table 1.3: The NFC Forum' s four RFID tag types
• Figure 2.1: Key events in the development of mobile proximity payments in Japan, 4Q 2001 - 2Q 2007
• Figure 2.2: Business model for NTT DoCoMo' s Osaifu-Keitai
• Figure 2.3: Key events in the development of mobile proximity payments in South Korea, 2Q 2002 - 4Q 2007
• Figure 2.4: Business model for SK Telecom' s Moneta
• Figure 2.5: Business model for Visa' s mobile payment service trial in Malaysia
• Figure 2.6: Key events in the development of the Octopus card in Hong Kong, 1997 - 2005
• Table 3.1: Market categorisation based on factors that affect ease of deployment for NFC services
• Table 3.2: Market categorisation based on factors that affect the size of the opportunity for NFC services
• Figure 3.1: Market categorisation according to ease of deployment and size of opportunity for NFC services
• Figure 3.2: Opportunities for mobile payment services according to the size of the organisations involved