Near Field Communications World » Softbank Mobile

KDDI, Softbank Mobile and SK Telecom to introduce NFC standard services in Japan and Korea

Sarah Clark — Thu, 15 Jul 2010 09:04:06 +0000

The three mobile network operators are to move away from the non-NFC mobile contactless technologies they currently support in favour of an NFC standard solution.

STANDARD: The three networks are switching to NFC technology

Korean mobile network operator SK Telecom and Japanese operators KDDI and Softbank Mobile have signed a memorandum of understanding that will see the three companies working together to switch from their existing non-NFC standard mobile contactless services to an NFC standard approach.

Japan and Korea are the current world leaders when it comes to providing consumers with mobile contactless payments services. KDDI and Softbank Mobile currently participate in the widely used Osaifu-Keitai service, developed by rival operator NTT DoCoMo and based on Sony's FeliCa technology. SK Telecom currently has 3.28 million users of its mobile payments service, developed in-house.

Both technologies enable consumers to use their mobile phone to make payments in stores and on public transport but are incompatible with each other and do not include tag reading functionality — a key driver of the three operators' decision to move to NFC.

Now the three carriers plan to use NFC technology to develop a range of compatible mobile payments, customer loyalty and promotions services that can be used by customers of all three operators in both Japan and Korea.

"Customers will be able to enjoy easy and convenient payment and additional services such as coupon benefits seamlessly without the need of renting and changing phones when visiting each other's country," says SK Telecom. "When the NFC- based payment system roll-out is completed, NFC phone users in Korea and Japan will be able to make mobile transactions after a simple downloading of a mobile payment application to their phones."

"Various services — mobile coupons, membership discounts and mobile gift vouchers — already in use in Korean and Japanese markets will also be available via NFC handsets," the operator adds. "Customers will be able to seamlessly use the convenient payment service as well as additional mobile services without any service interruptions or geographical limitations."

While Korea already has an installed base of 25,000 contactless card terminals that are compatible with NFC phones, the switch to NFC in Japan will require retailers to install new payments terminals that meet NFC and contactless card standards. And the key to the success of that is likely to lie with how NTT DoCoMo reacts to the news that KDDI and Softbank are to defect from Osaifu-Keitai. The operator has already developed an NFC standard service offering, which it has been demonstrating at industry events for several years, but is yet to announce any move towards introducing NFC services commercially in Japan.

KDDI announced a major NFC trial in April, with an impressive list of partners including Toyota, All Nippon Airways (ANA) and Japan Airlines (JAL), Hitachi, various card issuers — and NTT Data.

SK Telecom, meanwhile, introduced a next generation service called T Smart Pay in March. The new service enables customers to store up to eight credit cards in their mobile phones, as well as up to 30 membership/point/mileage cards and 50 coupons and is expected to form the foundation of the new NFC services offered by KDDI, Sofbank and SK Telecom.

"It is encouraging that mobile carriers of Korea and Japan have joined hands to promote mobile payment business," says Hong Sung Chul, executive vice president and head of service division of SK Telecom. "We hope this cooperation can become a strong springboard for boosting the overseas growth of SK Telecom's comprehensive mobile payment service, T Smart Pay, starting with the Japan market."

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

One of the players must take on the risk before NFC can succeed, says founder of Japanese mobile wallet

Sarah Clark — Thu, 21 Jan 2010 13:43:20 +0000

Carl Atsushi Hirano, the driving force behind the introduction five years ago of Japan's Osaïfu Keitai mobile wallet service, has set out his thinking on what was required to make the service a success and what it will take to successfully introduce NFC services in other countries.

HIRANO: "Somebody must take on the risk"

In the foreword to a new report on the Japanese mobile wallet service Osaïfu Keitai, Carl Atsushi Hirano, president and CEO of consultants NetStrategy and the head of mobile wallet services at NTT Docomo during the launch of the operator's Osaïfu Keitai service five years ago, has set out his thinking on what it will require to launch NFC services in other countries and why the technology has been a success in Japan:

The first reason is that I researched the dissatisfactions and inconveniences of daily life. I'm convinced that these 'dissatisfactions' and 'inconveniences' are the mother and father of every new industry. Why do I have to have so many loyalty cards or credit cards in my wallet?
Everything started with this idea. After a theft I would lose all of these cards, but if all of my cards are integrated on my mobile then all I need to do is make one phone call to my telephone operator to stop them. In order to create such a world, I created Osaïfu Keitai.
I am certain that there is a demand for such a market the world over, as much in European as in the United States.

"It is important to construct an ecosystem from which all participants of the value chain — mobile operators, providers of contactless card technology, companies managing the services of the real world, such as retailers, public transit companies or beverage dispensers — earn a profit," Hirano adds.

"However, to create this ecosystem, we need to solve the hen or egg causality dilemma, as Andrei Hagi (a professor at Harvard Business School) explained in his Multisided Platform Theory, and one of the players has to take the risk to create and coordinate the ecosystem," he adds.

"In Japan, NTT Docomo took on the role of the market coordinator taking on a high risk. I wish, from the bottom of my heart, that another company or brave person will give birth to this ecosystem, in Europe and in the United States. I am impatiently waiting for the day when I can buy a café au lait and a croissant in a Parisian café with my Japanese mobile."

According to the report, Mobile Felica in Japan, there are now a total of 60 million consumers equipped with Mobile Felica-enabled handsets. Of these, 35 million are customers of NTT Docomo's i-mode service, 10 million are signed up with KDDI and a further 10 million with Softbank Mobile.

Readers can download the executive summary of the report free of charge from the Jap’Presse website.

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

GSMA calls for mass market NFC handsets by mid-2009

Sarah Clark — Wed, 19 Nov 2008 15:45:22 +0000

The mobile industry association has finalised its device requirements for NFC handsets and called on manufacturers to put phones incorporating the Single Wire Protocol interface into consumers' hands by the middle of next year.

WE WANT IT NOW! The GSMA wants all new mobiles NFC enabled from next year

The GSMA, the global trade group for the mobile industry, has called for full NFC functionality — including the standardised 'single wire protocol' interface — to be built into commercially available mobile handsets from mid-2009.

At a meeting in Macau this week, timed to coincide with the organisation's Mobile Asia Congress, the association's board came out in full support of the ETSI-endorsed Single Wire Protocol (SWP) standard as the best way of providing the interface between a handset's Universal Integrated Circuit Card (UICC or, more commonly, SIM) and the embedded NFC chipset within the handset.

The endorsement follows a series of trials involving nine mobile operators that have been taking place in eight different countries (Australia, Canada, France, Japan, Korea, Malaysia, Taiwan, Turkey and the US) under the GSMA's UICC-based Pay-Buy-Mobile banner. Further pilots are planned across 14 countries by 15 mobile operators.

The move comes after the GSMA issued a detailed device requirement document to a wide range of vendors and suppliers in July. The association says 37 key players responded, giving a clear picture of the core requirements for any SWP/NFC device.

"There is no doubt that there is a huge latent demand for a large variety of mobile transaction services, of which there is universal interest in proximity payments, as trials across the world have already shown," says Rob Conway, the organisation's chief executive. "We are committed to ensuring that mobile payment services are delivered as efficiently and cost effectively as possible. But this will require device manufacturers to make sure that the vast majority of commercially available handsets incorporate the Single Wire Protocol and Near Field Communications features as standard."

"Doing so would enable the industry to leverage significant economies of scale and ensure greater accessibility of NFC services for mobile users," he added.

"This call for handsets is supported by recent operator trial results which indicate a growing consumer demand for mobile payment services," says the GSMA:

In Taiwan, in a trial of over 200 users, FarEasTone found that 90% of people felt positive toward to this new service. 80% of people were satisfied that the service is secure, and 40% said they would switch their monthly spending to a mobile credit card service.
Seven banks and four mobile operators — including Orange and SFR — involved in the "Payez Mobile" trial in France have announced the results of trials conducted with almost 500 sales outlets and nearly 1000 triallists. Over 90% of triallists said they found contactless mobile payment convenient, fast, and easy to use. In addition, 94% declared that they would recommend it to their friends and family. Merchants welcomed the possibility of offering to their customers an innovative payment solution, with over 80% saying they appreciated the speed and cutting-edge appeal of mobile contactless payment.
Equally, in Korea, SKT and KTF found that m-transportation was very popular with users, and this is likely to translate to other mobile payment services. Approximately 450,000 users of the "T-money" service were quick to adopt the service as it is convenient and compatible with existing readers. According to KTF's survey, 85% of m-transportation users indicated satisfaction levels were 'very high'. 85% of them believe that using a contactless mobile phone is much more convenient than getting their wallet out to use public transportation, and would continue to use the mobile service. "T-money" attracts users not only for the public metro and bus, but also for small transactions such as buying goods from convenient stores by simply tapping on the contactless readers.

Both MasterCard and Visa are supporting the trials with their PayPass and PayWave contactless payments services and, in September 2008, the GSMA signed a memorandum of understanding to share information withEMVCo, the international payments organisation operated by JCB International, MasterCard and Visa.

On the handset front, Nokia already has a commercially available NFC-enabled phone in the form of the 6131 NFC and LG has just released a prototype, the KU380-NFC. Motorola, Sagem and Samsung are also developing phones for NFC-enabled mobile payment services, the GSMA says.

"Gemalto, G&D and KEBT are among the UICC card suppliers supporting NFC-enabled mobile payment services," says the GSMA, and "Vivotech and Harex are among the companies developing NFC-enabled readers that support NFC-enabled mobile payment services."

Senior representatives of mobile operators around the world have stepped up to the plate to add their individual endorsements to the GSMA's call for handsets:

"As one of the first operators to trial mobile payments, we've seen first-hand the willingness of consumers to adapt to this new payment channel which is very much dependent on the availability of NFC handsets and the associated ecosystem," says Kris Rinne, senior vice president of architecture and planning at AT&T. "We hope that the GSMA's delivery of a consolidated set of minimum requirements will accelerate the worldwide delivery of NFC-enabled handsets to the market."

"We observed great potential for mobile payment services through T-money. We believe it is changing the behaviour of users and expect it to see significantly increasing demand over time. Supportive actions and collaborations with banks and especially handset vendors will help to speed up this demand," added Sang Ryul Lee, VP of the Transaction Business Group at KTF.

"Orange has run trials in France, Spain and the UK which show a consistent appeal to consumers in all countries for SIM-based, operator managed, mobile NFC services," commented Mung-Ki Woo, VP of payment and contactless at Orange. "For Orange, mass deployment is now mainly dependent on handset manufacturers providing a large range of adequate handsets."

"As Malaysia's leading mobile operator, Maxis is very enthusiastic about enabling mobile payments via NFC and leveraging the growing contact-less payment infrastructure in Malaysia," says Dr Nikolai Dobberstein, head of products and new businesses at Maxis Communications. "We are collaborating with strong partners on this initiative, Maybank and Visa International, and our focus is to establish a mobile NFC eco-system for commercialization which provides Malaysian customers with accessible & easy to use mobile payments."

"We are pleased to be part of this pioneering and innovative project trial as it will further simplify payment transactions and in the long run, help spur the growth of mobile commerce our country. Meanwhile, we are anticipating that vendors will incorporate NFC functionalities as a default feature in their handsets so more people can enjoy the technology," said Napoleon L Nazareno, president and CEO of Smart Communications in the Philippines.

"Telstra recently conducted a contactless mobile payments pilot with Australia's National Australia Bank and Visa and early results from the trial are positive," added Telstra's Ross Fielding. "Findings from an online survey of participants in the pilot found a high propensity to use the service and further advocate its benefits to friends and family."

And Cenk Serdar, chief VAS officer at Turkcell, commented: "We see potential in the market for NFC based mobile payment services, which can both be seen from our customers and banks' feedbacks. We believe that the customers may gradually adapt our services once the supporting handsets are on the market."

The full list of mobile operators taking part in the Pay Buy Mobile initiative also includes Brasil Telecom, Celcom, Chunghwa Telecom, CMCC, EITC, Etisalat, Far Eastone, GlobeTel, IMC Island, Kall, KPN, MCI, Meteor, Mobicom, MobilKom Austria, Mobitel d. d., MTN, MTS, NTT DoCoMo, Partner, Pelephone, Rogers Wireless, SFR, SingTel, SingTel Optus, SK Telecom, Softbank Mobile, Starhub, Swisscom, TDC, Telecom Italia, Telefonica O2, Telenor, TeliaSonera, Vimpelcom, Vodafone, Wind and Zain.

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news: