Has Vulnerable the Networks Time Finally Arrived?
NFC holds great promise as an enabler of mobile payments but the Indian market is yet to cash on its potential
Near Field Communication (NFC) for mobile payments has been making a buzz around the Indian market for some time but these buzzes have been just buzzes. No doubt, NFC holds a great promise as an enabler of mobile payments and has been successfully deployed around the world; the Indian market has been fooling around with this technology. For technologies like NFC and DASH 7 to successfully gain strong foothold in the Indian market, there are still other blocks to be placed right for this puzzle to get its final shape.
Considering the Indian scenario, the demand and the need stand at the bottom of the pyramid where m-banking (banking the unbanked with the help of mobile) still needs to attain its full bloom; so NFC technology, which is considered a technology for elites (urban population which is quite low as compared to rural population in India), is many levels up this pyramid.
Inspite of saying this, NFC mobile payments still hold immense opportunity for their growth in the Indian market when it comes to contactless payments in the urban India. Although NFC is a relatively new technology, its adoption will sky rocket over the next few years.
There is absolutely no doubt that trials and efforts are being taken in bits and pieces. Many handset vendors and mobile payment platform makers are tying up for this technology to make this a reality. Samsung Electronics has announced a NFC chip, Broadcom has unveiled a new family of NFC chips, Nokia has launched NFC enabled handsets in association with Paymate, HID Global in association with Sony has jointly developed contactless smart card reader platform, DMRC also has been in talks with NXP to explore how NFC can be deployed for ticketing through mobile in Delhi Metro.
RBI, to encourage contactless payments in India, recently approved daily transaction limit of ` 50,000. The GSMA has announced that 45 of the world’s leading mobile operators including Bharti airtel and Vodafone have committed to support and implement SIM based NFC solutions and services. In addition to the 2 operators, the list includes leading operators of the world like China Mobile, China Unicom, Axiata, Soft Bank Mobile, etc.
An effective pilot project named Citi Tap and Pay was started in Bengaluru some time ago. It allowed consumers, who were holders of Nokia 6212 handset (with embedded NFC chip) with a Vodafone connection, to make payments at select retail outlets by just tapping their phones at the pre-installed payment machines. NFC technology firm Vivotech Inc supplied contactless terminals and over-the-air transaction software.
NFC is definitely making inroads into the Indian market but slowly and gradu- ally. Before one comes to any conclusion whether this technology is next sought after for the Indian consumers, he will be jumping the gun. There are many unanswered questions for the industry to solve such as how will the new technology be adopted by consumers who are already cluttered with a plethora of technological innovations, does NFC have a future as a sustainable business venture, have companies already started developing the required infrastructure for these devices, what is the state of infrastructure readiness in emerging economies, etc.
The interoperability is very critical to the widespread adoption of NFC, enabling users to benefit from NFC services around the world regardless of operator network or device type.
A trend that is being followed around the world is the operator community is focused on driving the standardized deployment of mobile NFC using the SIM as the secure element to provide authentication, security, and portability.
The required infrastructure for this technology to be feasibly deployed in India is still a challenge. The RFID chips are yet to be deployed by the chipset makers on a mass scale.
NFC enabled handset vendors and mobile payment platforms need to collaborate and create NFC platforms more aggressively.