Philippe Martineau is executive vice president for mobile NFC business line at Inside Secure. Inside Secure has delivered more than 350 million contactless platforms worldwide to customers and partners, including many of the top payment card and mobile phone manufacturers, system integrators, and financial institutions. With 123 families of patents, including several essential NFC patents, the company plays a key role in secure semiconductor innovation.

Here, Martineau explores the latest developments in NFC.

MMX: What are the most exciting developments over the last 12 months in NFC payments?

PM: The most exciting development in NFC payment has been the alignment of several key factors that will encourage and accelerate widespread deployment and adoption of NFC payment. First, standards are converging and a truly open NFC stack has been released to the open source community. Second, an explosion of smartphone devices—50 million—are expected to hit the market this year. Third, NFC-based core technologies and devices were announced from industry giants Google, RIM, and Apple—each of whom owns the loyalty of hundreds of millions of customers.

Google’s support for NFC services in Google Android 2.3 single-handedly generated significant press and momentum. As mobile device manufacturers and software app developers embrace NFC, wireless operators are key to the technology’s success. AT&T Mobility, T-Mobile, and Verizon Wireless recently announced ISIS, a joint venture to build a nationwide mobile commerce network that will support NFC-based smartphones. The joint venture is working with Discover Financial Services’ network to develop an extensive mobile payment infrastructure with Barclaycard US as the first issuer on the network offering multiple mobile payment products. The alignment of major players behind NFC has been exciting.

MMX: What are the major NFC mobile payment deployments out in Europe/globally right now?

PM: There are several mobile payment initiatives in Japan and France, with high expectations for rapid deployment in Asia. However, many expect the US to lead with rich NFC-based services because of an installed acceptance infrastructure, a rapidly emerging services framework, broad adoption of smartphones, and the backing of leading merchants who are already beginning to deliver such services.

MMX: Why aren’t we using more NFC mobile payment solutions right now? It’s been a while since Visa and O2 ran a trial, but it still isn’t widespread. Why? What’s missing or needs to be done to spread the NFC love?

PM: Now that major industry players and carriers are behind the technology and preparing to deliver services, we expect to see adoption accelerate significantly. Some early adopter merchants, such as Starbucks, are paving the way for NFC-enabled services by acclimating customers to pay by phone by scanning a 2-D bar coding technology using their phone. This ‘training wheel’ approach will make it easier to transition to full NFC service in their 6,800 stores once NFC-enabled handsets are widely available later this year.

MMX: What are the major things to think about when considering, as an operator, how to implement an NFC roll out so that end users will want to use it?

PM: Most critical is to have a very clear value proposition to end users, including a rich user interface and clear use case. Next, end-user and merchant education will be essential to directing users to services and making the consumer experience simple. Third, interoperability and performance are considerations that arise after the user begins to use the device. As long as there is a strong value proposition, interoperability and performance may not be considered as important. Finally, a carrier’s brand will be a clear differentiator. Carriers that have developed trusted customer relationships will have the credibility to provide trusted services.

MMX: What are the key elements of handset design that need to be considered for NFC use?

PM: First, NFC RF functions will work optimally with proper antenna layout within the handset body; an NFC chip that delivers the appropriate balance of high performance, low power, and flexibility; and a flexible, secure application processor approach. NFC technology is quite powerful and can be used in a number of different modes, however, it must be deployed with good design. NFC services must be intuitive and simple to initiate, so the user interface must enable the user to easily use wallet functionality, applications, and control panels and settings. The core NFC software stack within the handset should be open and flexible to support multiple TSMs, multiple NFC chip suppliers, and multiple applications. The software stack should avoid incorporation of proprietary features that may limit the growth of NFC-enabled applications and services for manufacturers, operators, and service providers.

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