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Paypal’s new president comes from Mobile space

Paypal announced its new president as David Marcus, the VP of mobile payments at Paypal. Apart from his highly successful carrier path, this assignment definitely points me to the fact that mobile space is the way to go. The world’s leading e-commerce company has chosen the path through mobile payments.

I think we will be seeing more Paypal penetration into the mobile payments space. You can follow him on twitter via @davidmarcus

iCarte : contactless payment for iPhone

There’s been a lot of rumors around iPhone’s new release, iPhone 4 that it would come with an NFC chip but unfortunately it didn’t. It’d be a huge step for the contactless space -could also be a huge step for a proprietary system fully controlled by Apple, now we will wait for iPhone 5.

But wait, if you really want to see iPhone in action for contactless payment, you are in luck. Wireless Dynamics has a great solution for that; iCarte.

Luckily, I am part of an iCarte project here in Turkey. Yapi Kredi Bank and Visa deployed this iCarte project. Wireless Dynamics is the hardware and software provider while G&D is the TSM for personalization. Inside the smartcard within the iCarte, Visa Mobile Payment Application is running. And Visa Mobile Gateway is used for life cycle scripting.

iCarte is basically an integrated smart card and antenna attached to iPhone. Both iPhone 3 and 4 are supported. On top of the hardware, of course there is the software. Wireless Dynamics has a great app that enables the payment.

First you need to personalize the smart card embedded in the iCarte. After that, you need to verify yoıurself to the smart card with your PIN (passcode in Visa’s terminology). If you are the person that Yapi Kredi has authorised (Yapi Kredi is the issuer in this case) you are good to go with your iPhone for contactless payments.

When you first start the app, hardware is checked and connection is established.

After a successful start-up, you need to activate the application. This practically means you must personalize the Visa Mobile Payment Application.

Now you are ready to go.

With the iCarte, you can also save personal details of the transaction. iCarte -like other mobile payment solutions- is more secure than other contactless payment media. You can choose to enter your PIN before processing a transaction. This is optional, you can do this once and let the application process the payment without and verification.

I think it is the most usable (and practically the only) solution for the moment for contactless payment with iPhone.

Isis becoming a TSM

Isis is a unique approach to contactless space formed by the three mobile network operators in the US; AT&T, T-Mobile and Verizon. It certainly is one of its kind, no other country has had a such organization to handle a new functionality on the mobile phones.It sounded quite exciting.

In the new era, banks and MNOs seem to confront each other -I do not agree, though. MNOs in the US got together to handle it. And they started it in the most US way possible; they announced that they were starting a new payment scheme. They must have thought that they had all the components needed to start a new payment scheme: a mobile network, customer data with constant interaction and distribution channels. However it didn’t take more than a few months for Isis to recognize that it is a far more complicated task to do with what they have. There are thousand other issues to consider and Isis was not prepared for that.

Then on May, Isis announced that they have cancelled the original plan and now they are ready to reconcile with existing payment schemes. And after all, it seems that Isis is turning into a giant TSM for US banks.

It is a reasonable point for me to see that Isis is now a gateway between the banks and the mobile wallet. Isis will develop a mobile wallet in which banks, transport authorities and any other service provider can co-exist with each other. And it is a huge step that all the carriers are in the game; banks and customers will be free to choose (and switch) Isis will play a central role to manage all the applications to reside on a mobile wallet. It is at least a successful step at the mobile wallet wars for the MNOs.

Although it did not start with the current targets, I think Isis is a revolutionary step for the NFC era. Isis will definitely help NFC to reach masses. I will be watching!

NFC : Hottest trend in many ways

We have seen terrific progress in the NFC world throughout the end of 2010. Here are some highlights:

  • Google released the NFC API for Android with some sample code and NFC applications immediately began to roll out. Here is a good application for exchanging a file between two Android phones via NFC. It simply replaces bluetooth interface. NFC World also posted an article on the first Android NFC apps.
  • Apple has been playing around the NFC for some time and now it seems that Apple will be joining the game -but of course with its own rules. This is another mind opening post on the subject.
  • NFC Forum released a white paper on the use of NFC in Public Transport. This has been another step for setting the boundaries of the path to a contactless future in the public transport, which is quite complicated.
  • Latest contactless iPhone payment application was announced by Yapi Kredi Bank and Turkcell – a joint project by a bank and a mobile network operator. (Available only in Turkish) It is already a commercial product and pre-registration is open for iPhone 3 and 4 owners who already have a Yapi Kredi World Credit Card and a Turkcell SIM card.

It seems that NFC will be one of the hottest topics in 2011 around the smart phone world, public transportation, mobile payments and location based projects.

Turkey’s first mobile payment application from ​​​​​​​​Garanti Bank & Avea​​​​​​​​​​​​​​​​​​​​

Garanti Bank and Avea announced the mobile payment application at Cartes 2010 and now it is commercially available in Turkey. It is basically an antenna attached to the SIM card on which there is the PayPass application resides.

The SIM card used is the Gemalto’s N-Flex product. Garanti Bank provides the payment application(s) -there more than one, the default one is a pre-paid application, while Avea is the mobile network operator. The SIM comes with a MasterCard pre-paid application, but you are free to apply to more credit cards once you have the SIM activated. The STK menu allows the user to access the applications for activating and deactivating. You can apply for a pay-as-you-go or a post paid SIM. Post paid costs 40 TL (~20 EUR) and the pre-paid one costs 20 TL (~10 EUR)

It’s a smart move from Garanti Bank, which is clearly the market leader on the contactless space in the Turkish market. The pre-installed MasterCard pre-paid application on the SIM is also a nice touch since you do not have to go through the credit card application process. It’s sold through Ave’s distribution network since you have to activate the SIM first. The product is also backed with a bonus balance of 25 TL (~12 EUR) and 100 minutes air time if you apply before the new year. There is a nice video explaining the product to end users on the product’s official web site here. (Only in Turkish)

Another product announcement at Cartes was from Bank Asya, which is almost the same service but specific to mifare based Turkish Toll Payment system for highways.

With the add-on features and the successful start-up campaign, I personally find the product highly innovative based on the current hardware and software available in the market. As a wish, I am hoping these products to build the user acceptance of the mobile payments and make the bridge between the antenna chip to SWP chips.

NXP and Gemalto sign licensing agreement for adding Mifare to UICC

Today, Gemalto announced that Gemalto and NXP signed a licensing agreement for adding Mifare to Gemalto’s SIM products.

Gemalto is clearly the global market leader in providing banking smart cards. What else? Gemalto also has an OTA platform for mobile network operators. Gemalto is a member of Open Handset Alliance -the organization behind Android, which officialy announced the NFC support very short time ago. They even acquired the Mifare4Mobile team from NXP two years ago. Well, putting them all together, we can say that they have “the whole package” for an NFC ecosystem.

Without a doubt, transport ticketing is the killer application for NFC and Mifare is the strongest player for hosting the transport ticketing applications. All the mifare classic hacks couldn’t change this. NXP announced that 4 byte UIDs reached the end and they will start non-unique 4 byte UIDs or 7 byte UIDs for Mifare Classic.

So adding a mifare emulation applet on top of Gemalto’s current product range means only one thing; mifare based ticketing systems have a clear path for an NFC project. Gemalto can provide an end-to-end solution for transport operators, regulatory authorities, or even to banks for running a mifare based application via mobile phones.

Again; the only missing part is still the lack of handsets with NFC support!

Android jumps on the NFC bandwagon

As many of the authorities agree, Android is the most promising mobile platform. It is now the second after Symbian (bypassing iOS) and it is on the rise to the top. NFC support for Android was already under development and it was rumoured that the latest Android version 2.3 Gingerbread will officially support NFC. This was confirmed at the Web 2.0 Summit during the discussion session with Eric Schmidt, the CEO of Google with Tim O’Reilly and John Batelle.

He even demonstrated an NFC tag reading application that opened the location of the tag on Google Map. The full session can be watched on Youtube here.

After Nokia and Apple’s patents and applications on NFC, now Android has committed in to the NFC space. In general, banks and telco operators have already had many pilot programs and now the picture is almost complete with one little actor missing: the device manufacturers! Unfortunately there are too little number of handsets with NFC support.

Anyway, let’s look at the bright side. Now that all major mobile platforms officially support NFC, application developers can have a wider range of users. Mobile application markets have already solved the distribution problems, now the it is time for the -hopefully- gold rush!

Here are an idea of an NFC project other than obvious payment and ticketing applications:

Imagine check ins with Foursquare over the NFC tags attached to the cashier desks of the venues with NFC supported handsets. These tags (not necessarily just tags) can offer discounts based on the check ins for a specific time frame. Or even based on a pattern like buying gas from a certain network and then buying food from a certain supermarket chain. It can even trigger a payment application residing next to the coupon application.

The only question remains here is when?

Mobile contactless payment white paper from EPC and GSMA

With the release of Mobile Contactless Payments Service Management Roles Requirements and Specifications white paper prepared by EPC and GSMA, I think I have now the responses of my post on practical barriers of NFC.

EPC is the decision making and coordinating body of banks regarding payment for EU region. The main reason of EPC’s existence is to develop and maintain the SEPA (Single Euro Payments Area) and I believe they made a good job so far. And GSMA represents the interests of the worldwide mobile communications industry in 219 countries with nearly 800 mobile operators and 200 more companies within the ecosystem of mobile networks.

So, the co-operation of these two organizations on mobile contactless payments definitely filled a gap in the NFC related mobile contactless payments space. Now banks and mobile network operators have a reference document defining the commercial relations, technical roles, operational workflows and most importantly a single user experience approach for the customer. Although I am still not sure how much binding will this document be for the banks and mobile network operators but it will definitely help new projects.

The main highlights of the document are;

  • Setting the definitions of all context
  • Defining clear explanations of the roles
  • Defining the lifecycle management of the mobile contactless payment application
  • Examples of various scenarios of mobile contactless payment implementations between banks, TSMs and mobile network operators.
The below figure is an extract from the document which I believe is the heart of the document defining the lifecycle starting from the application to termination of the service.
I think anyone interested in the subject must read the paper which can be download from here.

A mind opening article on NFC

I bumped into this post on Contactless Payments group on Linkedin, which is about a great article on NFC Should Stand For “Needs Further Clarification” by Nick Holland from Yankee Group. I find the article very mind opening, especially for the banking/card payment world planning pilots/projects on NFC.

The adage “if all you have is a hammer, everything looks like a nail” is an apt description of current payment industry thinking. What is the most obvious use of contactless technology? Payment card. What does everyone want their phone to be? Payment card. What is your favorite color? Payment card.
Please read the full article on StorefrontBacktalk. Nick very well puts the ugly truth that NFC does not only mean processing a contactless payment transaction from the handset. A clear value proposition -other than the payment itself- must be defined for the contactless environment for an NFC payment application over the handset to be successful.

Embedded contactless reader for PCs from Sony and HID

Sony announced a very good news today for the contactless world. Sony and HID Global forms an alliance to create an embedded contactless reader for PCs. Sony, being one of the pioneers in the contactless technology, will be incorporating with HID, which acquired Omnikey -one of the best PC connected reader manufacturers, for building an embedded contactless reader.

Sony is already an influencer of contactless technology; they own their own contactless chip –Felica– and they are playing a huge role on the NFC area. Needless to say, Sony has huge opportunities on their home entertainment products from Play Station 3 to wide screen TVs and Vaio laptop line up for integrating with NFC based chips.

On the other hand, HID has a wide range of products in identity and security markets. I personally admire the PC connected Omnikey readers a lot, very robust and has a great support in terms of drivers and software.

I believe a contactless reader may eventually become a standard peripheral device for PCs, if this attempt is successfully completed. I can imagine how wide range of applications can be developed once the computers have embedded contactless readers. People can top up or check their balances/transaction history of transportation cards at home, (which is already being done in far east right now) process credit card transactions for shopping online or buy airtime for their NFC handsets. I had personally seen an embedded Felica reader in action on a Sony guy I had a meeting with, so this is not a long run. It just needs the right actors to be involved in the picture.

All contactless readers support both ISO 1443 type A and B, so these readers will support all current contactless chips that are available like Mifare, Calypso, Legic, etc. Of course that will bring a lot of political discussion over software and ownership of the reader IC, but for now let’s cross fingers for Sony and HID!