Just after publication of my prediction that war was breaking out between the major players in the NFC and mobile payments world, three mobile operators and three banks in the Netherlands announced collaboration on a unified m-payments system.
The announcement came after the parties had conducted research that proved it was both ‘technically and commercially feasible’ to create a shared national infrastructure. It seems amazing that something so obvious should have required research or would come as a surprise!
The alliance, in the form of a joint-venture company, is being created by KPN and the local units of T-Mobile and Vodafone along with finance players ABN Amro, ING and Rabobank, will manage the rollout. The aim is to enable m-payment transactions using Near Field Communication (NFC) technology, with the supporting payment software to be stored on a secure part of the SIM card. Full details are not yet available but it is safe to assume, nay essential, that it will be able to support contactless ticketing for public transport and possibly loyalty cards.
The announcement is a welcome and logical solution to address a potentially huge market and the second of its type in Europe after the Orange and Barclaycard announcement in the UK . It also comes after a recent period of enhanced activity related to NFC in the USA with AT&T, T-Mobile and Verizon Wireless planning a JV and in Asia with the SK Telecom, KDDI and SoftBank Mobile planning to develop a compatible NFC system across Japan and South Korea.
Time will tell if these announcements will lead to fully operational systems or that they will survive the potential hurdles of technology gaps and revenue sharing between the telecommunications and finance industries. Consumers can only hope that others join in alleviating the possibility that they will have to carry multiple handsets because they have accounts with other banks or that some transport companies and merchants opt to introduce alternative systems. This would mimic the existing situation in most developed markets where consumers are forced to carry multiple credit, debit and stored value RFID/NFC travel cards in their wallets and handbags.
Meanwhile, Visa, MasterCard and some major banks continue to trial their own NFC and m-payment technologies based on MicroSD cards, stickers, SIM overlays, SMS/WAP based apps and even unique handsets.
It is probably safe to say my article ‘Mobile Payments War Looming’ had no influence on the Dutch announcement but some of the key sticking points it raised may still come back to haunt the parties involved. Let’s hope the country that brought us the compact cassette, laser discs, CDs and smart cards (not to mention dykes) can pull another winner out of the bag!