Banks, mobile operators merchants, handset manufacturers and others will have to work together if near field communication will be adopted, according to a research report from the Smart Card Alliance Contactless Payments Council. Eighty-six percent of industry stakeholders believe NFC-based proximity payments will be adopted, and it will happen with a collaboration model bringing the relevant parties together.
But what’s needed to move activities forward are trusted service managers to coordinate the activities of those involved, the report states. There are many issues that still need to be worked out, including final selection of handset and chip standards, merchant enablement, standards for certifying and deploying secure payment applications, and, lastly and most important, development of a model for revenue-sharing arrangements among stakeholders.
Banks don’t feel the need to take the first step because they are already deploying contactless payment options and NFC isn’t a make or break proposition for most consumers.
Other findings from the survey include:
- Banks are waiting because they have the ability to take a step towards mobile payments by issuing contactless credit and debit cards.
- Operators will demand their fair share of revenue and won’t be sidelined.
- Non-traditional service providers are focusing on the person-to-person market.
- Merchants feel “in the dark,” yet merchants play a large and critical role in the NFC payments ecosystem. Merchants would be required to upgrade their systems to accept a new payment type. If merchants do not accept this method of payment, deployment of both technology and services will stall. In order to accept payments, merchants must incur the expense of adding POS equipment capable of communicating with NFC-enabled mobile devices. A well-defined business case must be developed to demonstrate the return on investment to merchants.
- Potential trusted service managers are angling for new services revenue.
Download the full Smart Card Alliance report here.