Report Considers Prospects for NFC

A new generation of mobile phones equipped with Near Field Communication (NFC) technology is set to revolutionise the way we decide what products to buy, where we choose to buy them and how we choose to pay, according to NFC Business Models, a new research published by SJB Research.

NFC phones contain a high security chip known as a secure element which acts like an electronic version of the user’s wallet, and can be used to replace everything from credit cards and loyalty cards to bus and train tickets, library cards, door keys and coupons, as well as cash.

The secure element chips can be built into mobile phones and other devices by the manufacturer, integrated into SIM cards issued by mobile networks to their subscribers, or retrofitted to existing phones via microSD cards or stickers issued by banks and other organisations.

“Whoever provides a consumer with a secure element can then generate new revenues by leasing space on the chip to other businesses that also want to offer next-generation mobile services to their customers,” says report author, Sarah Clark. “Mobile network operators, banks, handset manufacturers and technology providers around the world are all planning to create major new revenue streams by providing consumers with these mobile wallets. But understanding of the business models that are most likely to succeed is still in its early days, and there will be winners as well as losers in the NFC revolution.”

NFC Business Models explains in detail the latest thinking from around the world on how to implement the five fundamental building blocks required to make an NFC service a success. These are: the core infrastructure that will form the backbone upon which NFC services are delivered; the business models available to the mobile network operators, banks and handset manufacturers who will provide consumers with their mobile wallets; the issues involved and strategies for success in the NFC payments market; gaining buy-in from consumers and from service providers; and the launch strategies that are most likely to succeed.

The report addresses key questions facing the industry, including:

  • How can merchants be persuaded to adopt the contactless payments terminals required to support NFC transactions?
  • What are the benefits to banks of providing NFC services, and do the benefits outweigh the costs involved?
  • What kind of pricing models will need to be offered to service providers — and will they be sufficient to cover the costs of developing and making available an NFC service delivery platform and of issuing NFC devices to consumers?
  • Will consumers be willing to pay for an NFC mobile wallet? And what kind of services will they want to use?

The 170-page report costs £797/$1,258/€924). There’s more information, including a full table of contents, here.