NFC payments ecosystems need to be evolved from existing technology and networks toensure they are market friendly and sustainable. There are many approaches which can be adopted depending on which factors are taken into consideration and the importance placed on each. One of the key factors is where the mobile contactless payment application (MCPA), which resides in the secure element (SE), should be stored in the mobile handset. The owner – or issuer – of the SE has a major stake in the control of the ecosystem. This is one of the key areas of analysis in this paper.
To aid the business analysis, the paper does not consider every possible way of implementing NFC but just a few of the strongest contenders. Based on some realistic scenarios, it also details four ways of implementing NFC based on potential business models:
The mobile network operator (MNO) issues the universal integrated circuit card (UICC) as part of a collaborative model.
The MNO issues the UICC as part of a bilateral model.
The handset manufacturer issues the embedded chip as part of a bilateral model.
The MCPA service provider (SP) issues the microSD as part of a standalone model.
For each implementation, the paper provides a business rationale analysis, an expenditure analysis and some market and technical considerations. The analysis shows that it is possible to produce a business model for each case.
Stakeholders will recognise which of these NFC implementation models best fit their needs and appreciate that an exact match is unrealistic. Additionally, some players may want to use a combination of these ideas to suit their business model.
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To help put theory into practice a gap analysis together with some conclusions and recommendations is provided.
The aim of this document is to analyse potential business models for facilitating mobile contactless payments when an NFC device is used, taking into account all the stakeholders involved. The analysis focuses on point of sale (POS) transactions using cards as a