Christelle Toureille, Marketing director ME, Turkey N.Africa, telecommunication division at Gemalto
Hamza Ali, Batelco GM, strategy and business development
Tom Farrell, Vice president, Nokia Middle East
Mike Al Mefleh, Director, carrier product management, RIM Middle East
Near field communication is the buzzword on everyone’s lips. But what is it and how does it affect your everyday life? Smartphone and device manufacturers are jumping on the bandwagon, and as more projects are launched to take advantage of the technology, it is slowly gathering a multitude of loyal adoptees.
CommsMEA: What is the NFC market in the MEA region like at the moment?
Al Mefleh: Near Field Communication technology is enabling smartphones to become even smarter platforms. Its possibilities excite us at BlackBerry, driving us back to our heartland: innovation in mobile computing.
NFC will help change the way consumers shop, pay and save; and NFC-enabled phones will allow consumers to securely make payments, store and present various types of cards and redeem offers at participating merchants with the tap of their phones. It will reduce the number of plastic cards that people have to carry, such as loyalty cards, travel and parking cards, building security access cards and various forms of ID.
From RIM’s perspective, with NFC, your BlackBerry smartphone will help to replace all of these cards and allow you to recharge your various ‘top up’ accounts directly on your smartphone. With just a simple ‘tap’, you will be able to pay for these services.
Farrell: NFC has been the “in vogue” terminology bandied around for quite some time and is often referred to as a futuristic technology that is heading our way. All too often NFC has remained just that – an interesting concept, but one that has yet to make a meaningful difference to the everyday life of MEA consumers. We believe that that is about to change.
It’s early days for NFC applications and services but NFC has the potential to fundamentally change the way people shop, play, connect, pay and travel. There is a strong market opportunity for fun and innovative consumer propositions. Consumer awareness is increasing every day.
We are really encouraged by the positive feedback that we have received so far from both consumers and businesses alike. We certainly see momentum building and strong interest from many local organisations and brands who have expressed an eagerness to get involved with NFC.
Toureille: Turkey is definitely leading the way in the MEA region when it comes to innovation, and was the first country to deploy NFC. In December 2010, mobile phone operator AVEA partnered with Garanti Bank to launch their BonusluAvea NFC service and in April 2011, mobile operator Turkcell followed with the launch of its Cep-T Cüzdan platform. Some pilots are ongoing in the gulf countries and we can expect larger scale ones to come as mobile operators are closely looking into NFC.
CommsMEA: What applications of NFC have the most potential for commercial use?
Toureille: NFC is an enabler and the technology does far more than just provide a contactless payment function. It can turn the mobile phone, which the user is already deeply attached to, into a mobile wallet featuring a full range of high value-added services. The most common use cases which are driving adoption are of course payment along with transport applications.
Couponing and loyalty programs have also great potential as promotions, coupons and smart tags take mobile NFC one step further. Peer to peer applications also have a great future and thanks to the NFC technology, users will be able to exchange their business cards. As payment solutions mature and consumers become increasingly comfortable with its use, the development of other solutions based on NFC will gather pace and when it comes to NFC use cases, creativity will have no limit.
Ali: The NFC market in the MEA is still in its very early stages of adoption of such technology with some fragmented deployments in the region. Most influential applications for NFC will be typically mobile payments application for product and services at retail stores. This also should be the first service to be deployed by many players using NFC technology, however at a later stage, other services will follow which might include ticketing, storing ID data and other services related to access control.
Farrell: Within the Middle East, NFC has incredible potential for innovation in how companies and brands market to and interact with their customers. NFC provides a physical link to the online world and will provide merchants, banks, advertisers, operators, media agencies, developers and marketers a new way to engage with consumers at a more personal level.
We will see new campaigns directed towards increasing in-store foot traffic, with an emphasis towards tailored promotions and offers. Consumers will benefit greatly with loyalty being rewarded with unique content, discounts and incentives.
Businesses will benefit from a fresh, steady stream of consumer data which in turn will be used to enhance the campaign offers. While the malls and the merchants within the Middle East region will be the main players, travel companies, hotel groups, restaurants, sports & events groups etcetera will all get involved too. This will all help to pave the way for NFC based payments as it will establish credibility and confidence with consumers.
Al Mefleh: M-commerce is certainly the most broadly covered use case of NFC, and we’re working proactively with our partners and banks to put secure mobile payment capabilities into the hands of more and more BlackBerry users around the world. But the use cases for NFC extend far beyond mobile payments.
Based on the trials we are conducting, transport and loyalty cards are two very most popular use-cases that the industry is working to implement. There is also a huge opportunity for NFC in B2B implementations, for example on access control (building security), which is particularly relevant in cities such as Dubai. We are currently working with HID, a secure identity solutions provider, on trials of this technology in Europe.
For our BlackBerry user community, we offer the BlackBerry Tag feature – this is a unique feature for NFC-enabled BlackBerry smartphones that will allow users to effortlessly share contact information, documents, URLs, photos and other multimedia content by simply tapping their BlackBerry smartphones together. BlackBerry Tag will also enable friends to instantly add one another as contacts on BBM, which is incredibly popular in the Middle East.
CommsMEA: Have there been any trials or pilots of NFC in the region? Name specifics and the resulting outcome of implementations.
Toureille: In MEA region, Turkish mobile operators were the first to deploy their NFC services, partnering with banks and opening their platform to a wider array of financial institutions to boost adoption. The next wave is now arriving in several other countries, such as in the GCC, where mobile operators are to offer their subscribers extra services through their NFC and TSM platform, working closely with banks, mass transportation companies, hospitality ticket suppliers and marketing agencies to bring their subscribers new mobile applications and services such as transit tickets, prepaid events ticketing and loyalty programs.
Ali: There have been some activities recently in the Gulf region to trial and pilot NFC solutions. At Gitex 2011, UAE’s Etisalat announced features such as NFC payment service. Earlier this year, Qtel in Qatar through a partnership with the banking sector also announced a pilot and recently the UAE government in cooperation with Etisalat also announced that they will be using NFC to allow UAE nationals and expatriates to store their IDs on NFC mobile phones.
Farrell: Recently Nokia partnered with VOX cinemas for a consumer education campaign on NFC technology. During the campaign all N9 mobile phone users were able to reap benefits of the technology which included free cinema tickets, refreshments and downloading the latest movie schedules from all VOX cinemas. All this with just a tap of the phone on NFC enabled posters strategically placed at VOX cinemas.
Another campaign which also included an element of NFC promotion was the Nokia Gift Machine, an innovative marketing concept that is testament to our efforts to creatively link the online elements of social media along with offline tactics.
Al Mefleh: At RIM, we are currently engaged in many NFC trials with our carrier partners in the UAE, retailers and banks; and are partnering with companies such as Isis, who specialise in the technology standards of NFC.
In March, Qatar National Bank Group, Qtel, Oberthur Technologies and Mastercard Worldwide launched an NFC payments program. The trial launch of the mobile NFC program took place in line with the QITCOM conference and exhibition in Qatar. The program allowed consumers to make daily payments with just a tap of their NFC-enabled mobile phones such as the BlackBerry Bold 9900.
We were recently certified by MasterCard for our NFC-enabled BlackBerry smartphones, specifically the BlackBerry Bold 9900 and BlackBerry Curve 9360. The certification was granted on the basis of our smartphones meeting the functionality, interoperability and security requirements of MasterCard. With this certification, any MasterCard PayPass-issuing bank globally will be able to deploy MasterCard PayPass-enabled accounts to the SIM card of these smartphones.
CommsMEA: How can telecom operators benefit from NFC? Do they stand to gain any value out of it?
Toureille NFC will enable mobile phones to be used for a variety of new purposes at the heart of everyday life, opening up substantial new revenue opportunities for mobile operators. Mobile operators are at the very heart of the NFC ecosystem and by setting up a trusted service management platform they set up the scene for any service providers to come on board and connect to the platform to promote their services.
By offering a new comunication channel to service providers and providing their subscribers with enhanced services, mobile operators will benefit from new revenue streams. Moreover, development into this arena offers them the opportunity to build on customer retention, gain market share and explore a wide range of mobile marketing strategies.
Ali: Theoretically speaking, NFC technology should allow telecom operators to tap into new streams of revenues which are currently a walled-garden by other industry players, for example, financial transactions processing revenue in the banking industry. The expectation is that with the mobile phone being an essential tool for accessing, consuming and paying for services, operators will have new opportunities to diversify their revenue streams and work with others for the benefits of the end users. However, this will also depend on the mutual agreements between all stakeholders such as banks, policy makers, merchants, and of course operators in the market to create a healthy and sustainable ecosystem to support such a business.
Al Mefleh: Mobile operators benefit from NFC by giving their subscribers easy-to-use and convenient mobile contactless services. Also, operators can follow the twists and turns of the market as new business models emerge. If the mobile device gets lost or stolen, services can quickly be restored without compromising on the end users’ satisfaction. Above all, high levels of security ensure that subscribers can use the new services with confidence. NFC technology helps mobile operators build customer loyalty and generate additional revenue with innovative, intuitive contactless services.
CommsMEA: What is holding back deployment of the technology in the region?
Toureille: NFC standards have been defined and the technology is available, meeting all the required security standards and certifications levels. However, and like anywhere else in the world, the introduction of new technologies and NFC services to the market takes time as it requires the construction of complex local ecosystems and business models involving many players such as banks, transport companies, telecom operators, retailers, merchants, OEMs etc.
Once the NFC platform and NFC phones are rolled out, for people to be able to enjoy the benefits of NFC, the deployment of NFC point of sales terminals is crucial. The main challenge for the Middle East, would be to get the point of sales infrastructure ready to sustain the mobile payment use-case, so as soon as mobile operators and banks launch their services, subscribers could then be able to start enjoying the NFC experience anywhere, anytime without any further delays.
Ali: The region is among the highest in both smart devices penetrations and availability of mobile broadband high speed services, so in terms of penetration of key technology enablers there are no big issues. However, commercial services deployment based on NFC requires much more, for example adoption of a common Trusted Service Manager (TSM) by key stakeholders i.e. banks and telecom operators. Other key issues include things like national policies and regulations plus agreements on the business models by key stakeholders.
Farrell: The main reasons holding back deployment of the technology in the region are: firstly, the need for the technology to be adopted at a larger scale, i.e. retail stores, banks, airports in order for the consumers to be able to benefit from this technology. Secondly, more mobility devices need to offer NFC technology. Nokia now has the largest portfolio of NFC device models in the market – more than any other device manufacturer. Thirdly the issue of security and transaction related to NFC technology is yet to be developed further and implemented on a wider scale. Lastly, larger awareness among consumers of NFC technology and what it means to them is still required.
We need to remove the complexity and not focus on NFC as a technology but as an enabler of great consumer experiences. We at Nokia see this as a critical component of our NFC launches and we are concentrating our initial efforts on fun and compelling consumer offerings.
CommsMEA: What sort of a time frame do you see for region-wide adoption of NFC?
Toureille: Taking a step back and looking at all the countries which have deployed, many have started with the adoption of contactless banking cards. As end-users are becoming more used to contactless technology, thanks to the prevalence of cards, and merchant are being equipped with contactless payment terminals, the scene is set for NFC technology to take centre stage. Looking more deeply into the Middle East region, many banks have started looking into contactless cards and some of them have recently started deploying it.
Such deployments are the first steps towards NFC deployments. Local mobile operators are also looking closely into NFC, some pilots have already been announced and we expect that larger scale ones will soon start. It will take time for the infrastructure to be in place but we could realistically see wide scale NFC adoption in a two-three years.
Ali: We foresee the MEA region deploying services in phases as most of the key players are either piloting or preparing for such pilots. So in 2013 we should hear about more pilots with commercial deployments happening in 2014. A key issue with such a service deployment could be the slow adoption by the market for typical users to change their payment and buying behaviours.
Farrell: NFC has great potential for region-wide adoption, but it will depend on the power of the brands associated and loyalty they engender with the consumer. Exclusivity will be key here with access to unique content and events. VIP treatment goes a long way in the GCC and having devices that give you VIP status makes them status symbols.
Al Mefleh: One of the key challenges is providing a secure and convenient architecture for mobile commerce – how consumers, banks, payment networks and merchants interact. All of the players in the NFC ecosystem need to come together to create one consistent standard and the technical capability to ensure that customers will have a good experience – and this is what will drive adoption of new services.
CommsMEA: How secure is NFC? Tell us a few ways that the technology can be misused.
Toureille: Because NFC technology is used for payment applications, security is of course a central element and as a leader in digital security, we, at Gemalto do take this aspect very seriously by providing mobile operators with highest level of secure solutions. Our trusted services platform along with our NFC Upteq SIM cards, which store the consumer’s payment credentials and the payment applications, have all reached the highest level of security standards defined by financial authorities and have been certified by Visa and Mastercard. We can therefore say that NFC payment offers the same level of security as banking cards.
Moreover, in the event the phone would be lost or stolen, secure over-the-air (OTA) technology for remote management enables immediate remote blocking of the payment application when the client requests it, just as if you were blocking your banking card.
Ali: NFC is developed with secure communications in mind, however like any other new technology, the robustness will only be really tested when the service is widely adopted in the market and when hackers and others intruders can find enough incentives to exploit security holes in the technology which typically happens when the service is used by the masses. This is what the telecoms industry experienced in the start of the internet age and this is also what currently is being noticed in the evolution of the smart phones and applications and hence a similar trend can be expected with services based on NFC in future.