If NFC is not working for the wallet - what else can it do?

Welcome to the revamped Contactless Intelligence Weekly News Review. A slightly different style and one that we hope you will find a little more readable and easier to navigate. We're not saying that the old layout didn't work - but perhaps this will work better. Very similar argument, in fact, to a group of stories last week concerning the usage of NFC technology within the mobile wallet sphere.

Apparently, there is joint acknowledgement across a variety of sources that NFC is unlikely to set the mobile wallet world alight in 2013. A sentiment echoed by MasterCard CEO, Ajay Banga, who remarked last week in an interview: "NFC to me has an opportunity because it is applicable not just for payments but also to loyalty and security. Anything that goes beyond payments to the whole shopping and consumer experience and to the merchant experience will be important in the upcoming transition that’s going on with physical and digital. I don’t think this is a 12-18 month thing. Just think about the ecosystem that needs to be built for any of this to happen and I tend to look on it as a longer term effort.” http://bit.ly/186TtGy 

Joe Frisz, President and Founder of Paytroniks, at a conference in the same week, agreed "Mobile payments in the United States, more specifically NFC, will fail to generate significant traction for the remainder of 2013, but this is not necessarily because the consumers do not want or understand such solutions. This really has to do with poor adoption by merchants due to inferior value propositions and ineffective strategic positioning by solution providers, resulting in the virtual demise of Google Wallet and what appears to be less than formidable engagement of Isis pilots in Salt Lake City and Austin." On the topic of the news that the Isis wallet is to be rolled out nationwide in the US - you can read our views in the column below. http://bit.ly/15hY6cV 

Remaining on the topic of phones being used in shops -  this summer, the UK media highlighted the incident of a Sainsbury checkout person refusing to serve someone who was still on the phone claiming that it was against company policy to serve while the customer was on the phone. I saw an article by Nick Boothe in the UK's Independent, who summed up my feeling on the matter, "The now infamous Sainsbury’s checkout lady who refused to serve a customer while she talked on her mobile phone has clearly pleased a lot of people, if reaction in the media reflects public opinion. Most retailers, however, are trying to encourage people to use their phones and their iPads in their stores. They’re laying on free Wi-Fi, giving you access to their own systems and allowing you to download videos and apps. Anything that keeps you in their stores has got to be good, they argue". Precisely - especially if mobile usage in becoming vital for the shopping experience! http://ind.pn/192I6AG 

And, as for NFC - what is there left for it to do if not in the mobile wallet? Well, apparently - plenty! Just last week we saw stories of applications that use NFC as it is supposed to be used - as short distance, secure, data transfer. Take the story about the NFC refrigerator. Dongbu Daewoo has released its Klasse Smart series of refrigerators in Korea that incorporate an STMicroelectronics RFID tag to collect data about an appliance's functionality, and then transmit it to a user's mobile phone. http://bit.ly/186TgmE  Or the Samsung NFC printer (see below) or even the Kickstarter project to develop the NFC ring (see below). It would appear that inventive uses for NFC do not begin and end with the wallet.

And, finally, Visa Europe has a new CEO. Nicolas Huss has been announced as the company's next President and CEO and will take over from outgoing CEO, Peter Ayliffe, effective October 1st. Congratulations to him. http://bit.ly/1cLQxCO 

That's all for this week, if you are reading this at your desk in some city that is sweltering in the heat, I'm sorry. If you are reading this on a mobile device while on holiday - why? Take a break! We'll be back next week.

Steve Atkins
Contactless Intelligence

Is Google starting to turn away from NFC?

The U.S. Patent and Trademark Office last week published an Apple patent application for a system that allows users to "gift" media content from iTunes and their own library to other iOS device owners, with the transaction facilitated by Near Field Communication. The lengthy patent filing, titled "Media gifting devices and methods," is a fairly straightforward invention that could have greater implications as to how iOS device users purchase and consume digital content. 

Computerworld says that at the heart of the invention is gifting, or the simple idea of purchasing a song, e-book or video to give to another person. The document describes two main modes of giving gifts: purchasing media directly from the iTunes store, or sending a copy of already owned media to another device. 

Apple already has systems in place for gifting digital media with the iTunes store app, while Passbook-redeemable gift cards can be purchased with the Apple Store app. At present, there is no way to gift a piece of owned media directly from one device to another through iTunes. 

Last week's patent application outlines a number of techniques that iOS device owners can use to give gifts provided by iTunes, all of which involve digital rights management (DRM) and authentication keys. The system is similar to Apple's established giving methods in that one user purchases a gift and sends it to another person, but instead of using email, a gifter can transfer the purchase to the giftee over NFC. Which means the iPhone must have NFC technology onboard. 

The filed papers include a lot of diagrams that help explain the procedure - the example gift being a Bryan Adams song. This, said a particularly observant commentator, is the flaw in this patent filing, as nobody would share a Bryan Adams song. He may have a point…

In other news, Google is removing NFC functionality for gift and loyalty cards stored in Google Wallet, its mobile payments service. The support for such cards will be pulled on August 21, so this means that you need to spend any remaining gift card balances before that. However, if you have the physical gift cards, you can still continue using them. Google sent out an email to Wallet users who have added a gift and/or loyalty card into their accounts informing them of the change. The company stressed that this latest change will not affect NFC credit and debit card payments.

It does not seem to be the end for gift and loyalty cards on Google Wallet though — given that Google also said it was working with retailers to come up with other options for gift and loyalty card redemption within the service. One analyst who said the next iPhone will include NFC also said there's a small possibility that Google's recent statements indicate it could completely abandon NFC for mobile payments in the next few years.

"Nobody would be surprised if Google did away with NFC support," said Yankee Group analyst Jordan McKee, in an interview. "They're a little bit scared of it." While McKee is a proponent of NFC for mobile payments, he wrote in a blog that NFC adoption in the U.S. for mobile point-of-sale payments remains "negligible," adding that "any payment method based on the technology will continue to clutch at straws." McKee said if Apple puts NFC in the next iPhone, "it will be interesting to see what avenue Apple takes with it, and I hope it's not proprietary and limits the function of NFC and the growing momentum toward it." Apple's use of QR scanning with its current iPhones to support its Passbook app for redemption of loyalty and gift has resonated well with both merchants and consumers, he said.

Google shunning NFC, while Apple turns to embraces it? Now that is a silly season story!

Steve Atkins
Contactless Intelligence

A Scaletrix NFC racetrack in McDonald's?

A report out last week from Visa Europe claiming that the UK's monthly contactless spend has increased five fold to £45.2 million in June 2013 was good news for those of us wondering when mass acceptance was going to take root. Their follow-up news of increased contactless spend activity across Europe supported the information that the UK was not just an isolated market example.

Cash fare payments on London buses look set to be phased out in favour of contactless payments too; either Oyster or contactless payment card (CPC). Fewer than 1% of London bus journeys currently involve passengers paying cash and Transport for London (TfL) is now consulting on scrapping cash payments in 2014. TfL is also looking at measures to introduce a new Oyster card feature that will allow passengers to make one more bus journey if there are insufficient funds on their Oyster card - just to get them home. Passengers would then pay for this extra journey when they top up their card. TfL claim that cash payers would benefit from a cheaper fare, saving around £1 a trip as they switch to pay as you go (PAYG) Oyster or (CPC). The cost of collecting such low levels of cash is high. TfL say they would save £24m a year by 2020 that would be reinvested into the transport network for the benefit of everyone.

We like this approach at the Contactless Intelligence office. It gives the customer a real incentive to adopt contactless payments as there is a definite consumer benefit in doing so. Sure, TfL benefits, but it is still smacks of consumer over technology - which is vital to adoption. 

We also saw the news on the closing down of the Microsoft Tag. Ever heard of it? We had, but had assumed it had vanished years ago. But nope. Still around in 2013 but shutting up shop in 2015 - the Tag was one of Microsofts best kept non-secrets. Tag was developed in 2007 and looks different from the traditional barcodes and QR codes that are more commonly seen these days. Tags could be monochrome but are often multicoloured because colours can help pack more data into the Tag. Microsoft said the colours, combined with triangles of different sizes and layouts, can yield up to 3,500 characters per square inch. 

Writing for Gigaom, Kevin C. Tofel wrote, "In addition to providing far more data than standard barcodes, companies that use Tag can gather information about the devices and people that scan Tags. In order for Tag to work, a mobile device reads the coloured Tag using an app that then connects to Microsoft servers to translate the information into a web link or other item. Microsoft can then provide detailed analytics from the Tag". Considering how companies have been pushing barcode, QR codes and every other 2D contactless systems over the past 6 years, and how important analytics of such data usage has become - I am surprised that Microsoft never tried to make more out of this system. On the other hand, it's Microsoft. Maybe I am not that surprised.

But back to NFC and to finish this week's editorial – a really cool video from McDonald's Singapore featuring a racetrack from Scaletrix that makes up one of their Happy Tables and enabled through NFC Technology. Sounds a bit sappy, but surprisingly it's a really cool use of NFC tags. I highly recommend you watch it, but remember - this a McDonald's video so you really need a strong stomach for saccharine cute kids. And if there any fathers out there - would you really want your kids - fingers covered in Happy Meal stickiness and goodness knows what - to start handling and playing with your NFC-enabled Android phone? Think about it.

Until next week.

Will 'wearable computing' boost NFC adoption?

In a few weeks time, the IFA kicks off here in Berlin (6th - 11th September). For the uninitiated, the IFA is the world's leading trade show for consumer electronics and home appliances. So there is no surprise that every year we hear about the latest 'cool' consumer product in late August/early September that will be debuting at the show. This year, the product to watch seems to be the Samsung smartwatch (did you see what I did there? Pretty smart pun, huh?  Oh, there I go again!)

It looks like we could be entering the 'wearable computing' phase very, very soon. This may be good news to those who are cheering on the wide scale adoption of NFC payments and NFC technology in general. After we saw the release of the 'Pebble' earlier this year, and the launch of the 'Omate TrueSmart' a few weeks ago, the idea of the smartwatch has started to gain ground. With the September 4th release date of the Samsung Galaxy Gear fast approaching, leaked screen shots show the Gear smartwatch will use NFC to easily pair the watch to a smartphone over Bluetooth. 

That it will be shipped with full NFC capability, as the Sony version and others coming to the market are supposed to be, is good news. Again, this may put pressure on Apple to rethink their NFC strategy or they might get seriously left behind. Canalys, the market analyst, is predicting that smart watch sales will go from around 330,000 in 2012 to nearer 5,000,000 in 2014. That’s the kind of market growth that no-one will want to be left out of.

Although news that Apple is to bring to market an 'iWatch' is now shaping up to be more than a rumour. Two suppliers in Taiwan have won orders to build the much-expected "iWatch" for release in 2014, according to a Taiwan-based analyst and local reports. Quanta and Inventec will split the orders in a 60:40 ratio and could build up to 38m of them next year, suggested the Appledaily website, while CIMB Securities analyst Wanli Wang suggested that it might ship more than 63m units in the first year after its launch.

Apple has still not admitted that it is working on the device, but the possibility of an 'iWatch' has been the subject of growing speculation since reports surfaced earlier this year. Basis of the speculations are findings that Apple has a team working on a 'wearable computing' product – a field that chief executive Tim Cook called 'profoundly interesting'. The only thing to speculate on is if NFC will be integrated into the device?

For NFC, I believe, this integration into wearable computing will be a massive push. As a technology to interact with everyday scenarios, NFC has been dependent on consumers buying a smart phone with the technology included. Smart watches could potentially give millions of users without NFC enabled phones access to the simplicity and incredible functionality of NFC. If this really does happen, the ability to interact with NFC marketing and outdoor advertising (tags etc) or use as a payment vehicle may also explode and that, I think, is good news to many of our readers.

Until next week.

EMVCo green lights G&D's SkySIM CX family

This week saw our Contactless Intelligence team operating from the contactless development facilities of Infineon in Graz, Austria. After being given unprecedented access to see the latest contactless technology under development, I have to say that we all left very, very impressed. When it comes to contactless applications such as payments, Infineon seem to quite the company to 'watch' as they say. If you get my meaning…

Keeping within that theme, Samsung did indeed release their 'Gear' at the IFA in Berlin, to the kind of questions that were raised by this editorial last week. Namely, would it be possible to use the watch as a payment device. The answer appears to be 'yes', but we have still to see specific plans outlined by the company. Time will tell (pun intended).

Of course, the real element to allow all of this to happen is the NFC SIM card, of which Giesecke & Devrient got the go-ahead from EMVCo last week. G&D is offering the new SIM platform that allows several different NFC applications to be executed securely and simultaneously on a single SIM card. The SkySIM CX SIM-card family provides protected areas that can be used for electronic payment and ticketing applications and for customer loyalty programs. Network operators will thereby be able to expand their service offerings for banks, public transit authorities, and other service providers. The first product in the new SkySIM CX family has received EMVCo, American Express, MasterCard, and Visa approval, confirming that it meets the requirements for secure payment systems such as American Express ExpressPay, MasterCard PayPass, and Visa payWave. The SkySIM CX family also supports the transit applications MIFARE, CIPURSE, and Calypso. Talk about hedging your bets…

And of course, while we stay with the mobile theme, the GSMA has announced the first details of the 2014 GSMA Mobile World Congress. “Under the theme of ‘Creating What’s Next’, the 2014 edition of Mobile World Congress will highlight the most significant innovations and advances in mobile, providing a blueprint for the future,” said Michael O’Hara, chief marketing officer, GSMA. “Attendees will have the opportunity to experience firsthand how mobile is revolutionising business across many industries and transforming everyday life for billions of people around the world. We’re looking forward to welcoming the mobile world to Barcelona in February.” Get ready for the regular pilgrimage to the mobile Mecca that is Barcelona.

An interesting change was announced to Identive Group's management last week. For the uninitiated, Identive is a provider of solutions and services for the identification, security and RFID industries. Last week the company announced that its board of directors has appointed Jason Hart as chief executive officer and director, effective immediately. Ayman S. Ashour, who had been CEO since 2010, has resigned his executive role but will remain on the board of directors as non-executive chairman. Hart previously served as executive vice president of Identive’s Identity Management and Cloud Solutions division. “There is a major shift occurring in both information and access technology as companies, governments and individuals embrace powerful, flexible new approaches such as cloud services and mobile access,” said Hart. “We intend to focus Identive’s core products and technologies to drive a leadership position in these expanding markets. In particular, we see a significant opportunity to provide our customers with a clear pathway to Identity-as-a-Service and secure authentication on mobile devices using NFC technology. In the coming months we expect to share more details of plans to simplify our operations and strengthen our go-to-market capabilities.”

I feel that this could be a very positive turning point for the company after a bumpy few years. We got this change of personnel information directly from the company itself, so we don't expect to have the announcement refuted by the individuals concerned over Twitter. Unlike, well…

Until next week.

Time for the NFC industry to wake up and smell the B(e)acon?

It happens about twice a year that you can pretty much tell in advance what I am going to mention in this editorial. It is usually the closest Monday to an Apple WWDC and the release of something connected to the Apple iPhone universe that impacts payments and, well, everything. This editorial will be no different concerning the general topic, but the basics of what I will cover here is actually something that I have said before - namely that NFC may indeed find itself fighting Bluetooth Low Energy (BLE) when it comes to being an enabling technology for mobile payments in the very, very near future. From the beginning of October 2013 to be precise.

To be fair, though, it wasn't all Apple's fault. In fact Apple didn't really make much of a comment about BLE and the iBeacon application that it has coming out in the iOS 7 later this week. It's really the fault of PayPal. They are the guys who are championing the technology with their Beacon solution. If you don't know much about BLE and Beacons then I suggest you have a look at this to find out more and some of the other applications that we are seeing surfacing utilising the technology.

PayPal is a company hoping to take advantage of the growth of BLE. It has announced Beacon as a payment service that allows users to pay with their phones. Beacon’s USB dongle plugs into point of sale terminals and informs merchants when someone checks in using the PayPal app. They can then send personalized offers, let people know when their orders are ready and more, over a Bluetooth connection. Needless to say that, with two major companies pushing a technology such as BLE and incorporating the same name into their offering, commentators were quick to panic on Twitter last week and ring the death knell of NFC. While I don't think this is case -  thanks to the fact that NFC is more suitable for secure communications because of a very low proximity, critical in such cases as secure ID and so on - mobile payments may be a very different story. 

“PayPal Beacon opens the door to a fundamentally different way to use technology to make shopping more valuable and more personal for consumers and retailers,” says David Marcus, president of PayPal, which is owned by eBay Inc. “We challenged ourselves to find a better experience than swiping a credit card. We figured the only better way to pay would be to do nothing. Just walk in a store, and, like magic, when you’re ready to pay, money is transferred securely. No wallet. No card. Nothing to do. Not even touching your phone.”

If Apple were to link its iBeacon with payment information securely stored in its iPhone-wielding customers’ iTunes accounts (there are 575 million iTunes accounts, according to Apple), and secure access through its new biometrics technology fingerprint reader debuted this week, it could potentially launch into the mainstream the concept of paying at a store with a mobile phone. “Silicon Valley has anointed Bluetooth as its mobile payments technology of choice, and an all-out war against the established payments industry could be just a short time away,” says Rick Oglesby, senior analyst at mobile payments consulting firm Aite Group.

That sounds like a great customer shopping experience and, at the end of the day, isn't that the key to mass adoption of mobile payments? Be prepared to hear more about this technology from the 18th September onwards. Don't say we didn't warn you!

Until next week.

Google wallet moves to iOS - the end of NFC?

As expected, industry news were dominated by one topic last week: NFC versus BLE. Many commentators are expressing views on the subject, but they seem split towards their end conclusion. Namely, is this is the end of NFC for mobile payments and if that is the case - is this the end for NFC in general?

Luckily, most of the articles that I read came down on the side of NFC still having a valuable contribution to make in one form or another. Either in loyalty, marketing campaigns or security tokens. Although I do take issue with the artist who had an NFC chip implanted into his hand. There is an accompanying video of the procedure if you are of a less than squeamish nature.

Google, on the other hand, threw more gasoline on the fire by announcing last week that their Google wallet would now be available on the iPhone, which, as we know, does not run NFC. Now that Google Wallet no longer requires an NFC-capable handset, expect to see it on non-Android phones. Case in point: the digital wallet app became available for iOS devices on Thursday in the US iTunes App Store. As you would expect, you can’t use the app on iOS for contactless payments; that part still requires an NFC chip in the phone. But the new app includes many of the new features that Google announced in its latest Android update. That includes the ability to send money to any friend in the US with an email address, support for adding loyalty cards, and integration with Google Offers for redeeming discounts based on location using the app. The app will let iOS users in the U.S. scan to add debit and credit cards for sending money and making purchases online. Nitesh Patel over at Strategy Analytics has been kind enough to layout the arguments as to why Googles new wallet application does not spell the end of NFC or mobile payments. Worth a read, if only to calm down those individuals who have a vested interest in NFC reaching mass acceptance.

While we are on the topic on cash-replacing technology, we would like to draw your attention to new facet of the influential use of high tech, one that we have had our eye for some time now – innovative signage technology, or, as we have branded it, "The Endless Shelf". What does that have to do with mobile payment, you may ask. Well, put bluntly, if digital signage can turn a dull shop window into a Point of Interest, by adding a mobile point of sale functionality to it, you have a Point of Sale. The Endless Shelf Platform - a new online platform by yours truly - has been set up to push a vision of what a retail outlet could look like and function. Last week saw two exciting events take place that made us even more excited about what it to come in this area: Firstly, the '7th Digital Signage Conference Munich' saw upbeat industry leaders talk about a bright future, good market projections and exciting new projects all over Europe. 

At the same time, at the prestigious 100% Design Show, taking place in London during the Design Festival, Samsung Chemical Europe and Samsung Semiconductor went straight to the heart of retail - the retail store designers - and presented their concept of the 'Retail of Tomorrow'. Together with high-end names such as Zaha Hadid Architects, INOX communications and EG Electronics, Samsung really pushed to boat here for mega cool urban street wear label heidi.com and presented - wait for it - an interactive shop-in-shop retail satellite. The digital signage totems (featuring NFC) do look pretty nifty and will go a long way to convince those picky designers. Now, THIS is what we call a cool vision and one we are very happy to push. You can click on the banner below to visit the site.

Until next week.

Steve Atkins
Contactless Intelligence

From Clinkle to Braintree - what's in a name?

The debate of NFC and BLE might continue to rage on, but other technologies behind possible competing mobile wallet solutions continue to grab the headlines within our sphere of contactless payments. And one of them is picking up more money than possible sense at the moment.

I am talking about a mobile wallet start-up called Clinkle. The company is developing a mobile payment solution but is being more than a little mysterious about exactly what their technology is based upon. Early reports from early tests of the product imply that it uses high-frequency sound waves to transfer payment signals between mobile devices and merchant terminals. Although you would be hard-pressed to know how it works from the teaser video they are running on their website that speaks about how "we are all in this together" (a message that the UK government has been passing about for the past few years).

Similar to Facebook, Clinkle will initially be made available to college students, where critical mass may be easier to achieve among early adopters and local retailers. The company says Stanford University, University of Michigan, Duke University, Southern Methodist University, and University of Alabama are upfront in student sign-ups to the Clinkle wait list.

And while it all may seem a little hokey considering that soundwaves at a POS is nothing new – VeriFone has been offering this solution since their acquisition of Zoosh (debuting in New York City Taxis only a few months ago) or France-based Tagattitude with their NSDT transaction technology – Clinkle is certainly attracting investors. It has been reported that Richard Branson has just invested into the company, after they secured $25 million in seed funding from such groups as Accel Partners, Andreessen Horowitz, Intel Capital, Intuit, and individuals such as former PayPal chief Peter Thiel, former vice chairman of Wells Fargo Bob Joss, and VMWare co-founders Diane Greene and Mendel Rosenblum. What do they know that we don't?

Speaking of PayPal, they have once again demonstrated their commitment to creating a new mobile payment solution through the purchase of Braintree, a Chicago-based start-up that was founded in 2007 and has about 4,000 merchants using its service. A bargain for $800 million (I actually don't know if I'm being sarcastic here). PayPal agreed to pay the $800 million in cash (!) for Braintree, whose platform helps process payments for start-ups such as Airbnb, TaskRabbit and Uber and lets users pay each other for free through a mobile app.

PayPal paid so much for Braintree for three main reasons, according to Sanjay Sakhrani, an analyst at Keefe, Bruyette & Woods, reported in USA Today: "First, the deal gives eBay access to current and prospective clients of Braintree. The start-up has focused on integrating its payment platform with fast-growing start-ups and the mobile apps that power much of their business, Sakhrani explained. Second, Briantree's Venmo business has gained a lot of traction with younger users, a demographic that PayPal may have been struggling to reach, according to the KBW analyst. Third, Braintree has superior application programming interfaces, or APIs, which control how different software interacts with each other. This is important for attracting software developers to a platform. While PayPal has been trying to improve its APIs, it probably made sense to buy Braintree and quickly adopt its APIs", Sakhrani said.

John Lunn, PayPal’s global director of developer networks, speaking with GigaOM last week put it more succinctly, “Braintree is a company that works at startup speed, which is what we need.” Knowing how fast the mobile payment market has got to move - I hope that they can make the integration between the two companies work; PayPal says it will run its developer program in parallel with Braintree after the acquisition, but will eventually offer PayPal services to app developers directly through Braintree. PayPal will bring its full complement of financial services to Braintree’s development platform. Expect to see Braintree supporting transactions in a lot more countries. Said Lunn, “We have people on continents Braintree hasn’t even been to yet.”

Oh, and the answer to the title of this weeks editorial? Millions of dollars if everything works out for the best...

Until next week.

Steve Atkins
Contactless Intelligence

Mobile wallets – could retail learn from transport?

In an industry where you just can't keep a good idea down, the mobile wallet momentum continues to dominate many of the stories concerned with contactless and mobile transactions. Despite evidence to the contrary. Only recently (and by that I mean a few weeks ago), Consult Hyperion came out with the following results, according to their most recent survey: When consumers were asked who they would trust most to issue a mobile wallet: banks, phone companies, Google or major retailers, or no-one because they would not actually use a mobile wallet service. The issuers that got the most votes of trust were banks at 20%, followed by Google at 10%, retailers such as Walmart at 3% and phone service providers at 2%. However, just over 64% stated that they would never use a mobile wallet.

“The survey shows that issuers need to do a better job of conveying what mobile wallets are and what benefits they bring,” said Consult Hyperion Global Ambassador Dave Birch. “However, it’s interesting to see both that Google outranks both phone operators and major retailers as a trusted issuer, despite the obvious retail applications of wallets, and that banks retain the most trust for such a service.”

This observation should not come as a shock to many people. The water has become increasingly muddy and confused when it comes to the subject of mobile payments, or more specifically, the much vaunted mobile wallet. However, one area that people ARE accepting is the idea of contactless and mobile ticketing, as our stories show this week. This area has gone from strength to strength. Although more in a commuter capacity perhaps than long haul.

To start with, OSTP Alliance has gained another partner in the form of Indian firm Kyros Soft Ltd. The company has been delivering innovative smart card solutions for a wide range of customers and applications in India for well over a decade. Kyros also developed the first smart card operating systems for e-government applications in India. In responses as to why they joined the OSPT Alliance, Renold Ranjit, managing director of Kyros had this to say, "“Security and extensibility are essential elements of modern fare collection systems. The CIPURSE™ open standard is a smart way to future-proof our offerings in the Indian market for both traditional and mobile capabilities. We are committed to helping our transit customers gain the flexibility to anticipate and meet passengers’ needs well into the future.” They obviously believe that there is a great opportunity in the CIPURSE standard for travel in India. They could be right.

Of equal interest last week was a report looking at passenger usage of technology. More than 90% of airline passengers say technology helps them when travelling but using a smartphone for travel services has yet to go mainstream. This is despite the finding that three quarters of passengers carry a smartphone according to results of the 2013 SITA/Air Transport World Passenger IT Trends Survey. The survey conducted at six leading airports around the world paints a picture of tech-savvy passengers who are equipped to use the latest mobile travel services but are cautious about doing so. At 76%, the proportion of passengers carrying smartphones outstrips the global average of 40% in the general population.

The report has some optimism in it by noting that the next wave will be the widespread adoption of mobile services. To persuade people to change their travel habits, services will need to deliver additional value over existing technology choices. Passengers have said that information services are what they want most on their mobiles – with 63% saying they would definitely use their mobile for flight search and 58% for flight status. This compares to 29% who would definitely want to receive promotions on their mobile and 37% who would buy tickets. “Passengers are ready but remain at the edge of really going mobile. This year’s survey has shown that the industry should indeed offer mobile services that make it easier to book travel and manage the entire journey. Improving usability and utilizing the unique capabilities of smartphones is the key to increase usage. Airlines and airports that recognize this, and provide passengers with easy-to-use mobile services that improve the travel experience, will enjoy higher adoption rates and passenger satisfaction, ” said Francesco Violante, CEO of SITA. 

Isn't that the key to mass adoption of all of the mobile services/wallets – a better, inclusive experience for the user, rather than a focus on the owner of the wallet or the issuers? I know that my examples are rather diverse but I think that the retail industry could learn a little from the transportation industry here. What do some of our transportation focused readers think? I would love to hear (and print) your thoughts on the matter.

Until next week.

Steve Atkins
Contactless Intelligence

NFC is so 'over' mobile payments...

As some of regular readers may have realised by now, I am becoming a little jaded with the term 'mobile payments'. Especially with it being thrown about (in my opinion) far too often to meet a variety of interpretations. To be honest, I had started to feel a little on my own in this mindset but I am happy to report that this is not the case.

Last week saw me reading the blog post of Neil Burton, Director of Product Strategy for Earthport, who, in a post titled 'Mobile payments is meaningless', points out that, "the problem arises partly because payments is itself an abstract. 'Nobody wakes up in the morning and wants to buy a payment' - Eric Sepkes. Sure there are lots of them and they are easy to count, but as a banker once told me, the payment is like the scene of crime after a murder - chalk marks around where the body was. Accurate, but it doesn't tell you a great deal. What's interesting is what happened before." Well said, Neil. 

For me, mobile payments have become the industry's way of describing anything that involves NFC technology. I consider this to be  disingenuous to NFC technology as a whole. NFC, as a lot of our readers know, has a much greater role to fulfil than the enabling technology for the 'latest' mobile wallet. Happily, last week saw a few more NFC-related stories that had nothing to do with the mobile wallet. 

Blue Bite, the mobile standard in Out-of-Home™,  and Creative Mobile Technologies, LLC (CMT), one of the US's largest OOH digital networks and premier technology and payment processing solutions provider for the taxicab market,  are to enable thousands of taxi media screens with Blue Bite’s mTAG®.  This is part of a US rollout that will be available in taxicabs in cities including Boston, Chicago, San Francisco, Philadelphia and Anaheim. The technology was first piloted in New York City taxis this summer with Vogue and allows for interaction with local content and advertising campaigns this autumn.

The Vogue campaign, which ran for three weeks in August / September, was described that as pushing the boundaries of mobile advertising and produced encouraging results for integrated mobile campaigns.  Upon viewing a clip of the Editor’s Letter from Vogue’s September issue on screens in taxis, users were directed to 'tap' or 'scan' the screen for additional exclusive content. Utilizing NFC technology, users were instantly able to view exclusive mobile content, share Vogue’s video with friends via social media (Twitter and Facebook), and subscribe to the magazine’s digital edition with a special offer. More than 21% of people who interacted, shared the campaign with their friends through social media and via email. Good results there then.

Wooshping also alerted us to the fact that they had worked with Nokia music on a music initiative at New York’s Webster Hall to deliver interactive music using NFC and QR technology last month. The tech was installed on multiple posters, displays and stickers throughout the venue enabling music fans to take home a free musical souvenir of the event. All audiences had to do was tap the NFC tag or scan a QR code to get instant access to custom made mixes. Nokia Lumia owners got access to mixes prepared exclusively by the US Nokia Music team. Uk-based Wooshping partnered with Nokia Music to support the NFC/QR code initiative. With a pre-agreed content schedule, and making use of the Wooshping Cloud-based management capability, the playlists were updated on a weekly basis without the need to swap out collateral at the venue.

Last week we reported an a Kickstarter project to use an NFC technology-based ring that would automatically give the wearer access to their secured Android phones. This week we heard of rumours of  the imminent release of the 'Gem' and 'Sauron' from Google which should be announced officially on the 31st October, alongside the Nexus 5 and Android KitKat 4.4. 'Gem', is purportedly a codename for a Google smartwatch (rumour at the moment) but the second big mystery product is purportedly codenamed 'Sauron', and that's all anyone knows about it. There have been murmurings online that this could refer to a Google ring with NFC capabilities which will automatically unlock the Nexus 5 when you pick it up. It's a similar idea to the Motorola Skip, which is an NFC-enabled clip which instantly unlocks the Moto X when it comes in close proximity with it. So more possible wearable NFC technology. This could take bling to a whole other level.

Getting back to Neil's post though, the idea that the interesting part of the payment process is what happened 'before', is exactly where next year's Contactless Intelligence Spring Conference is going to focus upon. Called 'Learning from Experience',  we will focus upon the customer experience as a whole, from attraction, to discovery, awareness and consideration to action and advocacy within the entire customer shopping experience. The technology we cover is part of the entire process - not just at the point of payment. For that matter we have included some very influential organisations and projects right from the outset of the conference agenda creation, including the British Retail Consortium. So that may give you an idea of what kind of information is going to be given out at the conference. More details will be given out in the next few weeks but most importantly, the date is now set for the 29th April 2014 in the Hilton Tower Bridge, London.

Trust me when I say that for the 2014 conference, we have something special in mind that will NOT be available at any other events!

Until next week.

Steve Atkins
Contactless Intelligence

Two steps forward, one step back.

A colleague in the mobile payment industry spoke to me last week about the latest wallet solution (more on that in a few weeks time). During the conversation he admitted that, if he were a journalist covering the contactless and mobile payment industry right now, he would have no clue how to make sense of such a huge amount of disparate information pertaining to the offerings out there today.

I know what he means. With so many wallets out there at the moment, and so many connected to mobile POS systems, and some based around the magnetic stripe system at the check out (must be an American mobile wallet - right?) it has become very confusing. But let's get back to the wallet that talks to the magnetic stripe reader. Loop is the very latest in the mobile payment offering. Their Kickstarter page describes the products (the Loop Fob and ChargeCase - their spelling) as thus; the Loop Fob is a small audio jack device with a built-in card reader to safely store your cards encrypted into a secure memory module. A microprocessor and a magnetic induction loop within the Fob allows you to transmit your card data to just about any merchant card reader. And for the ChargeCase; The Loop ChargeCase is a sleek, protective case that provides you with a secure wallet that you can use, but also delivers up to 60% more battery power for your iPhone 5 and 5s when you need it. The ChargeCase comes with an audio jack mag stripe reader to swipe in all of your mag stripe cards into the Loop device.

I'm sorry - what? We're talking about a mobile wallet that can now talk to the POS's magnetic stripe reader. I understand that Loop makes the point about being able to talk to almost any POS with this technology and I applaud them for doing so. I also understand where they're coming from in the business case but really - the magnetic stripe reader? America is still heavily reliant upon magnetic stripe but I thought the Chip and PIN system was supposed to start rolling beyond Europe. I kind of feel that this is indicative of our industry not being able to get its act together and come up up with a usable approach that pushes the industry forward - not just solving one problem at a time. We need a system solution that can evolve as a whole.

Talking about a solution that is evolving and growing - we come to NXP's MIFARE. They have started their own MIFARE partner program offering what they call, Registered Partners and Premium Partner levels. NXP say that they have created the program to offer increased levels of value to the MIFARE ecosystem and that it will allow members easier access to benefits and more visibility of their expertise as a partner company. NXP recommends buying MIFARE products and solutions from over 300 companies registered on MIFARE.net, which is pretty impressive. Certainly the MIFARE name is seeing a little more action these days in various news releases about project wins that related to partners involved in the MIFARE4Mobile Industry Group. The latest being lat week's announcement that Gemalto is providing its UpTeq multi-tenant NFC SIM cards with embedded Mifare4Mobile technology for a pilot program enabling mobile NFC ticketing for public transportation in Rio de Janeiro, Brazil. 

I think that these are good examples of companies working together to create synergistic movement in a specific market place. Something that I have not really seen in the payment industry so much, despite many working groups and good intentions. Then again, I am willing to be proved wrong and would happily print an article penned by one of our readers who has a different view.

Print - or perhaps even invite them to speak out the next Contactless Intelligence conference. After all, the main topic will be about us (the industry) working together, 'learning from experience' and creating a few groups that can move us forward. So what do you say? Care to join us and get your voice heard?

Until next week.

Steve Atkins
Contactless Intelligence



I know that we at Contactless Intelligence have been a little flippant when it comes to the take-up of the Isis mobile wallet. But it has now announced a national US roll-out so we feel it only fair that we bring attention to a range of videos that Isis have produced to promote the Isis wallet. These are the four videos we highlighted last week and thanks to our readers, the UTA video actually trended across Twitter last week so thank you for that. Actually - Isis should be thanking us...

Mobile payments slow down. But don't stop.

Even as early as the 2nd quarter of this year, banks and MNOs were putting mobile payments at the top of their ‘must implement’ list. Many were convinced that Apple was about to release NFC technology within their latest iPhone offering and expected that demand for NFC-enabled apps/payments/everything(?) would immediately spiral out of control. Who would want to be left behind should that happen? But when it didn’t come to fruition, as Apple stubbornly remained noncommittal about the technology, things seemed to slow down.

However – most Android phones contain NFC and a slow down doesn’t mean a full stop. With Android phones starting to dominate the smartphone market, NFC technology is still being launched worldwide, though at a more moderate pace.

Strategy Analytics has lowered its outlook for NFC-based mobile payments to reflect the slow pace at which operators are pushing NFC payment services, limited NFC payment deployments by handset makers, and the continued slow adoption of contactless payments by retailers. The Strategy Analytics Wireless Media Strategies (WMS) service report “NFC Mobile Payments Forecast Update: 2013-2017” estimates 115 Million NFC handset owners will spend just over $48 Billion using their NFC phones by 2017. Although $48 Billion is a large amount it represents a drop in the ocean of the multi-trillion dollar global retail sector.

The healthy growth in sales of NFC handsets has yet to be matched by the adoption and use of handset based NFC payments services, with many mobile operators pushing back the launch of NFC-based mobile payment into the final quarter of 2013 or in to 2014 and beyond. “With the exception of China, where we see some momentum from China Mobile deploying its mobile wallet service, fewer mobile operators than anticipated launch NFC payment services in 2013,” says Nitesh Patel, Director, of the Wireless Media Strategies (WMS) service at Strategy Analytics. “Furthermore, handset OEM Samsung, which announced its strategic partnership with VISA Inc. in February 2013 has yet to officially offer a secure payments service based on that relationship.”

While acceptance of contactless payments at point-of-sale (POS) terminals takes time to grow, and operator efforts at launching NFC services remain anemic, alternative methods of making in-store mobile payments through merchant friendly solutions such as LevelUp and Square Wallet have gained pockets of traction, and are fragmenting the mobile payment sector. David MacQueen, Executive Director of Media & Apps at Strategy Analytics added, “The prospect of both Apple and PayPal launching alternative mobile payment solutions based on Bluetooth Low Energy (BLE), not NFC, and increasing interest in dynamic QR codes from PayPal, adds further uncertainty to the role of NFC in supporting in-store mobile payments. Therefore, the success of ISIS, the NFC-supported mobile wallet joint venture between operators AT&T, T-Mobile and Verizon is not guaranteed, despite its scale.”

One thing that could work in mobile payments favour (surprisingly) is the concern that is encouraged by various media  outlets in the UK of contactless payments cards being unsafe, insecure and an easy way to lose control of your money.  Not helped last week by UK bank First Direct writing to its customers saying "we have made changes to clarify that if you have a contactless debit card you must remove it from your wallet or purse before using it to make a contactless payment."

This change seems a response to the reported cases of mistaken payments, where money has been taken from peoples' accounts without their knowledge but where they think they brushed against a reader by accident. First Direct offered no further written explanation to customers. But a spokeswoman for the bank admitted the change was being brought in to prevent payments being made accidentally. She said: "If you don't remove cards from your wallet there is a danger the payment may be taken from the wrong card. It could be a bit of a nightmare if it came from a card where there wasn't enough money."

Not sure that the same problem would appear with mobile payments - perhaps the mobile payment industry could play on one fear to allay another? It's not like it has not been done before…

Steve Atkins
Contactless Intelligence

Bio-hacking and security fears

Must be that time of year again. Last week, yet another paper was published citing security concerns over contactless payments and showing academic evidence that the 10cm transmission distance between card and reader was in fact not true after a researcher picked up data transmissions from a distance of 45cm.

Thomas P Diakos, a researcher at the University of Surrey, built equipment that could reliably pick up on synthesised payment data from a distance of 45cm. "The results we found have an impact on how much we can rely on physical proximity as a security feature", said lead academic supervisor Dr Johann Briffa. "The intended short range of the channel is no defence against a determined eavesdropper." At that distance, fraudsters could harvest information without arousing suspicion, the researchers said. The team published details of their research in a paper in the Institution of Engineering and Technology's Journal of Engineering website last week.

However, the UK Cards Association, which represents credit and debit card issuing organisations, has played down the research, arguing that the data obtained by the team - card number and expiry date - would be of little use to fraudsters. "Instances of fraud on contactless cards are extremely rare," said a UK Cards Association spokesman. "Although the sort of contactless card reader built by the University of Surrey might be able to interrogate a card, any data obtained would be limited to the card number and expiry date that can be seen on the front of the card," the spokesman said. "A fraudster would find it very difficult to make a fraudulent transaction using this information - and it certainly could not be used to make a cloned card."

Yet security concerns persist. In April, a UK-based survey found that a quarter of Brits find contactless payments "scary". Bank First Direct recently felt the need to change its terms to make clear that customers should remove cards from wallets before making payments to avoid charging the wrong account. The connection between mobile and contactless payments and the element of security is still one that should not be taken lightly. Google, I would argue (although many will probably disagree), has decided to throw a spanner in the works on this topic, though.

Earlier this year, Google launched the 2013 Nexus 7 tablet and announced that it would be the first Nexus without a secure NFC element, leading many to speculate on the future of Google Wallet. With the launch of the Nexus 5 and Android 4.4 KitKat this last week, we don’t need to speculate any more, because Google Wallet will now emulate that secure element, meaning that the hardware required in the past is no longer a requirement, effectively opening up Google Wallet for all.

Secure element emulation will open up the NFC sensor to all sorts of apps, essentially allowing you to use NFC for just about any transaction you can think of.  This doesn’t just mean money, but can also mean security cards, gift cards, access control and so on.  There are many scenarios that can be developed here, and according to the Android user community it’s all going to be possible with Android 4.4 KitKat as developers build in the functionality.  NFC just got a whole lot more useful with a 'simple' software fix, they say.

However, while we are discussing the need so secure elements to ensure validation - what could be more secure than bio-hacking yourself and having your NFC element actually installed within your body? Sound a bit thriller sci-fi but that's what a gentleman called Amal Graafstra is doing and trying to raise enough money so that he can offer the service to all who show interest. You can read all about it here. It is probably one of the stranger stories that we have covered concerning NFC chips. The implantation of RFID chips in bodies has been around for a while now but I have a feeling that this is something that has the potential to become a lot more than a simple 'one-off'. Imagine people just waving their hands over contactless readers to pay. Jedi 'Force' control, anyone?

Finally, just to remind you all that we will attending CARTES 2013 again this year and should other attendees have something they would be interested in us covering on Contactless Intelligence I urge you to get in contact with us as soon as possible to set up a time and date. We look forward to hearing what you have to say.

Steve Atkins
Contactless Intelligence

Mobile wallets still dominating NFC news

I don't think that the stakes have ever been higher for mobile wallet adoption. Especially considering that the latest estimates of US market revenues are coming in at about $4trillion. A new report by Javelin Strategy 6 Research though points out one element that I think everyone in this industry is aware of: no one company appears to have cracked the secret yet.

The report analysed the current strategies of the five existing contenders, Apple, Google, Amazon, Facebook, and eBay's PayPal, versus those of the major payment networks, largest financial institutions and top mobile network operators. The research details which players are winning and losing and what needs to happen to gain consumer mobile wallet adoption.

Each member of what is referred to as 'The Gang of Five' is working hard to remain in what they consider to be prime positions by providing apps, games, products, movie product endorsements, lots of online promotion and those, oh so essential, success stories to retain potential consumer engagement. Javelin's TIP (Trust-Innovation-Privacy) Model analysed the competitive space of mobile wallets from the consumer perspective. It has found that over the past year, PayPal moved up into the top spot as the most trusted brand surveyed and the firm with the highest ratings for privacy protection. Essential, now that security is moving to the top spot as a major barrier to adoption.

With one in five consumers supposedly ready to adopt a mobile wallet in the next year, PayPal looks to be in a pretty good position to take the lead in mobile wallet adoption. "Mobile wallets threaten existing providers as they can disrupt the relationship between customers and their primary banks at the point of sale," says Mary Monahan, director of Mobile at Javelin Strategy & Research. "Issuers and merchants can be cut out of the transaction details and revenue as customer relationships are weakened through the introduction of new mobile platforms. A case in point is PayPal's history of steering customers to less expensive ACH routing that is less favourable to issuers."

It's not just the wallet contained within the phone that is getting more and more attention. The actual act of purchase at the point of sale is starting to change with the onset of the mobile wallet. Only last week we saw Merchant360 claiming to have cracked NFC at the point of sale. The company, who are involved in payments and value add ed services integration at the point of sale have announced the release of bi-directional NFC between enabled mobile phones and Point of Sale (POS) terminals from Ingenico and VeriFone.

This, says Merchant360, opens the door for any brand to work with the merchant to engage the consumer for more than payments at the point of sale. The solution allows for direct transfer of receipts and issuance of coupons from POS to mobile with and without payments.

Merchants and value add service suppliers can now engage consumers using open NFC standards even if their mobiles are offline. “Lack of this capability has been a significant hurdle to the global adoption of NFC,” said Felix Marx, CEO of C-SAM and one of the founding members of the NFC Forum. The solution is intended to help mobile payments organisations and value add services organisations provide a better engagement at the point of sale using NFC technology.

This, during the same week that we saw mobile wallets arrive in Columbia and MasterCard signing a strategic agreement with Rogers Communications of Canada. An agreement that saw the company support mobile payment innovations, including the Rogers™ Prepaid MasterCard® available inside the newly launched Rogers suretap™ wallet operating on MasterCard’s payment network. Despite the feeling that we may have had over this summer, the end of the year appears to be buzzed with mobile wallet news and new offering - perhaps in time for the mass adoption we are all being promised in 2014?

We should all discover a little more next week as Cartes kicks of its annual conference and exhibition – with this year's show focused on NFC. After all, who can talk NFC without bringing the mobile wallet and the world of payments to the fore? And with a section focused on mobile payment and smart shopping, there is bound to be a lot that people want to talk about. 

The mobile payment revolution scheduled for 2014 perhaps?

Finally, just to remind you all that Contactless Intelligence will be attending CARTES 2013 again this year, and should other attendees have something they would be interested in us covering on Contactless Intelligence I urge you to get in contact with us as soon as possible to set up a time and date. We look forward to hearing what you have to say. See you next week at Cartes!

Steve Atkins
Contactless Intelligence