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Mobile

Year of the Mobile Wallet

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Are you waiting for the day when your smartphone is your wallet, providing the convenience of waving your mobile device at the POS, selecting a method of payment, entering your PIN for security and receiving a digital receipt?

This concept is already reality in Japan, and we should see major progress toward true global implementation this year.

Google and ISIS, a joint venture of Verizon, AT&T and T-Mobile (ISIS is also partnering with Barclay’s and Discover), have announced wallets based on near field communications (NFC), providing clear direction on the standard method for mobile devices to securely pass payment information to POS. As stated in the Mobile Blueprint, ARTS supports this direction.

NFC is the de facto standard for secure communication between mobile phones and devices like retail point of sale, and NRF and ARTS are pleased to have reached a formal agreement of cooperation with the NFC Forum.

When NRF undertook the development of a Mobile Blueprint in 2009, the NFC Forum was one of the first organizations to agree to participate. We specifically reached out to the Forum because it is dedicated to ensuring a global standard for mobile payment, and a true mobile wallet will never become reality if you cannot use it globally. The Forum has been working for more than five years to make this possible.

Due to ARTS’ strong alliance with standards organization in Japan, we were aware that the rate of mobile payment adoption was very high but based on a different chip protocol (Sony Corporation’s FeliCa). Thinking, “Here we go again — competing standards,” we were delighted to learn that the chairman of the Forum was Koichi Tagawa, a Sony executive who has led the Forum to enable NFC and FeliCa to work together. Principal Forum members like NEC, Docomo, QUALCOMM, Microsoft, AT&T, Nokia, Rogers, Gemalto and PayPal are among the more than 125 companies that have given many hours of expertise to ensuring that mobile becomes truly global.

From my 20 years of experience with ARTS, however, I can tell you that creating a standard is merely a first step. You also need conformance testing to assure that devices and systems accurately implement the standards; NFC Forum recently completed the first phase of conformance testing.

The next step is marketing: Chip makers, handset manufacturers and the mobile operating system providers (RIM, Android, Windows and Apple) must be sold on the advantages of NFC and build support for it into their products. The NFC Forum is now focused on marketing, and has high hopes that 2011 will be a big year for NFC adoption.

Android, Microsoft and RIM have announced support for NFC, as have the Google and ISIS wallets. Nokia is beginning to place NFC chips in its devices, and manufacturers will soon follow suit. Unfortunately very few NFC readers are installed at POS; it’s estimated that only 500,000 U.S. POS terminals are so equipped. Purchase and installation of these devices is a major expense for retailers, so there must be a solid value proposition to warrant the investment.

To learn more, read the Mobile Blueprint at www.nrf.com/mobile or investigate NFC Forum offerings at http://www.nfc-forum.org. The Forum and NRF/ARTS are working to provide you convenience and security in accepting mobile payments: Help us make it happen.

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