NFC Mobile Payments & Marketing Opportunities: Forecasts & Analysis 2009 - 2014

Published by: Juniper Research Limited

Published: Sep. 1, 2009 - 123 Pages

Table of Contents

Glossary

Executive Summary

Introduction

Executive Interviewing Programme

What’s New in NFC?

New NFC Retail Marketing Opportunities

Market Projections

Mobile Device Markets

NFC Device Markets

Figure ES.1: NFC Device Shipments (m) Split by 8 Key Regions 2009-2014

Table ES.1: NFC Device Shipments (m) Split by 8 Key Regions 2009-2014

NFC Devices in Use for Payments

Figure ES.2: NFC Devices in Use for Payments (m) Split by 8 Key Regions 2009-2014

Table ES.2: NFC Devices in Use for Payments (m) Split by 8 Key Regions 2009-2014

Interim NFC Solutions (Stickers & SD Cards)

Figure ES.3: Total Number of Mobile Subscribers (m) With Interim NFC Capability Split by 8 Key Regions 2009-2014

Table ES.3: Total Number of Mobile Subscribers (m) With Interim NFC Capability Split by 8 Key Regions 2009-2014

Global and Regional Transaction Value Forecasts

Figure ES.4: Total Value of NFC Transactions ($m) Split by 8 Key Regions 2009-2014

Table ES.4: Total Value of NFC Transactions ($m) Split by 8 Key Regions 2009-2014

NFC Total Payment and Retail Marketing ARPU Opportunity

Figure ES.5: NFC Mobile Payment & Retail Marketing Incremental ARPU Opportunity ($) Split by Payment Transactions, Coupons and Smart Posters 2009-2014

Table ES.5: NFC Mobile Payment & Retail Marketing Incremental ARPU Opportunity ($) Split by Payment Transactions, Coupons and Smart Posters 2009-2014

NFC Drivers & Constraints

Figure ES.6: NFC Drivers and Constraints

Recommendations

1. Mobile Commerce & Payments Market Trends

1.1 Introduction

Figure 1.1: Telstra 1H 2009 Mobile Revenues Split by Voice and Data

1.2 Market Drivers and Constraints

Figure 1.2: Mobile Payments: Summary of Market Drivers & Constraints

1.2.1 Drivers

i. Attractive to Users

ii. ARPU Growth Opportunity

iii. Larger Retail Transactions

iv. Cash Replacement

v. Developing World Financial Services

vi. Lower Churn for Mobile Operators

vii. Migrant Workers Driving International Money Transfers

viii. Smartphone Growth

ix. Quicker than Cash

1.2.2 Constraints

i. Handset Supply

ii. Poor User Experience

iii. Business Model Uncertainties

iv. Lack of Global Technology Standards

v. Regulatory Hurdles

vi. User Support and Help

vii. Transaction Costs

2. Mobile Payments: Market Structure

2.1 Introduction

2.2 Definition

Figure 2.1: Generic mCommerce Payment Process

2.3 Segmentation

2.3.1 Mobile Commerce Segments

Figure 2.2: Mobile Commerce Market Segmentation

i. Categories of Mobile Payments

a) Remote Mobile Payment Sub-segments

b) Point of Sale Payment Sub-segments

2.4 Classification of Payment Schemes

Table 2.1: Mobile Payment Classification

2.4.1 Remote Mobile Payment

i. Mobile Phone Bill - “direct to bill” (D2B) Payment

ii. Premium Rate SMS (PRSMS) - Digital Goods

iii. Online - Payment for the Mobile Web & WAP Billing

iv. SMS Payment - Mobile Wallet and Account Based Payment

Figure 2.3: PayPal Mobile “Text To Buy”

v. Person-to-Person (P2P) Payment

vi. Remote Physical/ Mobile Web & WAP Billing

2.4.2 POS (Point of Sale) Mobile Payment

i. NFC Payments

ii. Text and PIN

2.5 On Deck & Off Deck

3. NFC & FeliCa Technology Drivers & Inhibitors

3.1 Introduction

3.2. Near Field Communication (NFC)

3.2.1 Technology

3.2.2 NFC Implementation

Figure 3.1: Oyster Card Using MIFARE Technology

Figure 3.2 Moscow Metro Mifare Contactless Card System

Figure 3.3: Typical NFC Implementation

3.2.3 Interim NFC Solutions

Figure 3.4: Integration Phase Comparison - NFC and Mobile Broadband

i. NFC Stickers

Figure 3.5: Twinlinx My-Max NFC Sticker

ii. SD Cards

Figure 3.6: Giesecke & Devrient NFC SD Card

3.2.4 Use Cases: NFC Forum Interview

i. Specifications and Application Types

Figure 3.7: NFC Application Types

Figure 3.8: Uses of NFC

ii. Further Vertical Markets

Figure 3.9: NFC in the Automotive Industry

3.2.5 Security

3.3 FeliCa

3.3.1 Introduction

3.3.2 Standards & Specification

Figure 3.10: Sony FeliCa IC Card and Reader/Writer

3.3.3 Security

Figure 3.11: Sony FeliCa Security Features

Figure 3.12: FeliCa Networks Platform Management

3.3.4 Uses

Figure 3.13: Uses of FeliCa

3.4 NFC Drivers and Constraints

Figure 3.14: NFC Drivers and Constraints

3.4.1 NFC Drivers

i. Transaction Efficiency & Growth

ii. Infrastructure Availability

iii. Success Stories and PR

iv. Future Service Enhancements

v. Widespread NFC Applications

vi. One to One Mobile Marketing Opportunity

3.4.2 Constraints

i. Business Model Uncertainties

Figure 3.15: NFC Ecosystem Top Level View

ii. Device Availability

iii. Service Complexity and Management

Figure 3.16: NFC Ecosystem Detailed View

iv. Ecosystem Incentivisation

v. Infrastructure Availability

4. Market Forecasts: NFC Payments, Fees & Retail Marketing

4.1 Introduction

4.1.1 NFC Payments

4.1.2 New NFC Retail Marketing Opportunities

4.2 Methodology

4.2.1 Approach and Assumptions

Figure 4.1: NFC Market Forecast Methodology

4.2.2 Geographical Splits

4.3 Mobile Subscriber Forecast

Figure 4.2: Mobile Subscriber Base (m) Split by 8 Key Regions 2009 - 2014

Table 4.1: Mobile Subscriber Base (m) Split by 8 Key Regions 2009 - 2014

4.4 Mobile Device Shipment Forecast

Figure 4.3: Mobile Device Shipment (m p.a.) Split by 8 Key Regions 2009 - 2014

Table 4.2: Mobile Device Shipments (m p.a.) Split by 8 Key Regions 2009 - 2014

Figure 4.4: Mobile Device Shipments Churn (% p.a.) Split by 8 Key Regions 2009 - 2014 61

Table 4.3: Mobile Device Shipments Churn (% p.a.) Split by 8 Key Regions 2009 - 2014

4.5 NFC Mobile Device Shipment Forecast

Figure 4.5: NFC Mobile Devices (% of Shipments) Split by 8 Key Regions 2009-2014

Table 4.4: NFC Mobile Devices (% of Shipments) Split by 8 Key Regions 2009-2014

Figure 4.6: NFC Mobile Device Shipments (m p.a.) Split by 8 Key Regions 2009-2014

Table 4.5: NFC Mobile Device Shipments (m p.a.) Split by 8 Key Regions 2009-2014

Figure 4.7: Total Number of Mobile Subscribers (m) With NFC Devices Split by 8 Key Regions
2009-2014

Table 4.6: Total Number of Mobile Users (m) With NFC Devices Split by 8 Key Regions 2009-
2014

4.6 Interim NFC Solutions Forecast

Figure 4.8: NFC Interim Solutions Shipments (m) Split by 8 Key Regions 2009-2014

Table 4.7: NFC Interim Solutions Shipments (m) Split by 8 Key Regions 2009-2014

Figure 4.9: Total Number of Mobile Subscribers (m) With Interim NFC Capability Split by 8 Key Regions 2009-2014

Table 4.8: Total Number of Mobile Subscribers (m) With Interim NFC Capability Split by 8 Key Regions 2009-2014

4.7 NFC Devices & Interim Solutions

Figure 4.10: Global Comparison: Subscribers with NFC Phones vs Interim Solutions (m) 2009 - 2014

Table 4.9: Global Comparison: Subscribers with NFC Phones vs. Interim Solutions (m) 2009 - 2014

4.8 NFC Devices in Use

Figure 4.11: Percentage of NFC Devices in Use Split by 8 Key Regions 2009-2014

Table 4.10: Percentage of NFC Devices in Use Split by 8 Key Regions 2009-2014

Figure 4.12: NFC Devices in Use (m) Split by 8 Key Regions 2009-2014

Table 4.11: NFC Devices in Use (m) Split by 8 Key Regions 2009-2014

Figure 4.13: NFC Devices in Use as % of All Mobile Subscribers Split by 8 Key Regions 2009-2014

Table 4.12: NFC Devices in Use as % of All Mobile Subscribers Split by 8 Key Regions 2009- 2014

4.9 NFC Devices & Interim Solutions in Use

Figure 4.14: NFC Devices & Interim Solutions in Use (m) Split by 8 Key Regions 2009-2014 72

Table 4.13: NFC Devices & Interim Solutions in Use (m) Split by 8 Key Regions 2009-2014

4.10 NFC Transactions Traffic

4.10.1 Average Number of NFC Transactions

Figure 4.15: Average Number of NFC Payment Transactions per User p.a. Split by 8 Key Regions 2009-2014

Table 4.14: Average Number of NFC Payment Transactions per User p.a. Split by 8 Key Regions 2009-2014

4.10.2 Total Number of NFC Transactions

Figure 4.16: Total Number of NFC Payment Transactions (m) p.a. Split by 8 Key Regions 2009- 2014

Table 4.15: Total Number of NFC Payment Transactions (m) p.a. Split by 8 Key Regions 2009- 2014

4.11 NFC Payment Transactions Value

Figure 4.17: Average Value of NFC Payment Transactions ($) Split by 8 Key Regions 2009-2014

Table 4.16: Average Value of NFC Payment Transactions ($) Split by 8 Key Regions 2009-2014

Figure 4.18: Total Value of NFC Mobile Payment Transactions ($m) Split by 8 Key Regions 2009-2014

Table 4.17: Total Value of NFC Mobile Payment Transactions ($m) Split by 8 Key Regions 2009-2014

Figure 4.19: NFC Gross Payment Transaction ARPU ($) Split by 8 Key Regions 2009-201478

Table 4.18: NFC Gross Transaction ARPU ($) Split by 8 Key Regions 2009-2014

4.12 NFC ARPU Opportunities

4.12.1 Mobile Payment Transaction Fees

Figure 4.20: NFC Payment Transaction Fee ARPU ($) Split by 8 Key Regions 2009-2014 79

Table 4.19: NFC Payment Transaction Fee ARPU ($) Split by 8 Key Regions 2009-2014

4.12.2 NFC Retail Marketing

Figure 4.21: NFC Retail Marketing Incremental ARPU Opportunity ($) Split by Coupons and Smart Posters 2009-2014

Table 4.20: NFC Retail Marketing Incremental ARPU Opportunity ($) Split by Coupons and Smart Posters 2009-2014

4.12.3 Total NFC ARPU Opportunity

Figure 4.22: NFC Payment & Retail Marketing Incremental ARPU Opportunity ($) Split by Payment Transactions, Coupons and Smart Posters 2009-2014

Table 4.21: NFC Payment & Retail Marketing Incremental ARPU Opportunity ($) Split by Payment Transactions, Coupons and Smart Posters 2009-2014

5. Applications & Services

5.1 Applications and Services

5.1.1 Global

i. GSM Association Interview

Figure 5.1: Pay Buy Mobile Participating MNOs Worldwide

ii. NFC Forum Interview

Figure 5.2: NFC Projects Testing a Variety of Applications

5.1.2 North America

Figure 5.3: Visa payWave Payment Options

5.1.3 South America

5.1.4 Western Europe

i. Overview

Figure 5.4: A1 mobilkom austria: Buying Train Tickets

ii. Visa Europe Interview

a. Market Assessment

b. Future Trends

iii. O2 UK Interview

b. O2 Wireless Festival 2007 & 2008

c. London Fashion Week February 2008

Figure 5.5: O2 Money Service

iv. Italy

v. France

5.1.5 Eastern Europe

5.1.6 Indian Sub Continent

5.1.7 Far East & China

i. NTT DoCoMo

Figure 5.6: Osaifu-Keitai Service Concept

Figure 5.7: Osaifu-Keitai in Various Scenes in Daily Life

Figure 5.8: Growth of Mobile Commerce Revenues in Japan 2004 - 2007 (100 million yen)96

ii. SK Telecom

5.1.8 Rest of Asia Pacific

i. Malaysia

Figure 5.9: Maxis FastTap Service

Figure 5.10: Maxis FastTap Service Outlets

ii. Singapore

iii. Australia

5.1.9 Africa and Middle East

6. Vendors

6.1 Introduction

6.1.1 Innovision

i. Products and Markets Update

Figure 6.1: Topaz Tags

ii. Top Market Trends & Issues

6.1.2 NXP

i. Products and Markets Update

ii. Top Market Trends & Issues

6.1.3 Nokia

i. Products and Markets Update

Figure 6.2: Nokia 6216 Classic

ii. Top Market Trends & Issues

Figure 6.3: Evolution of Mobile Financial Services

6.1.4 ViVOtech

i. Products and Markets Update

Figure 6.4: ViVOtech POS Product Range

Figure 6.5: ViVOtech Strategic Development Areas

ii. Top Market Trends & Issues

6.1.5 Proxama

i. Products and Markets Update

ii. Top Market Trends & Issues

6.1.6 Mobile Distillery

i. Products and Markets Update

ii. Top Market Trends & Issues

7. Standards & Forums

7.1 Introduction

7.1.1 Who is Doing What?

Table 7.1: Overview of Selected Forum Activity

7.2 ETSI

7.2.1 Members

7.3 The GSM Association

7.3.1 Mobile Money Activities

Figure 7.1: GSMA Mobile Money Activities

Figure 7.2: PBM Purchasing Process

Figure 7.3: PBM Architecture

7.3.2 Members

7.4 International Organisation for Standards (ISO)

7.4.1Members

7.5 Mobey Forum

7.5.1Members

7.6 NFC Forum

Figure 7.4: NFC Forum “N” Mark

7.6.1 Members

7.7 Open Mobile Alliance (OMA)

7.7.1 Members

7.8 EMVCo

7.9 European Payments Council

7.10 Smart Card Alliance

7.10.1 Members

7.11 Further Organisations

Abstract

This report provides an extensive analysis and market appraisal of the commercial opportunities open to players operating in the rapidly expanding mobile NFC (Near Field Communication) market. The report examines the opportunities available in both the mobile payments market and the mobile retail market (smart posters and coupons), as well as newly emerging interim solutions such as stickers & SD cards.

In an extensive six year forecasting model the report presents market figures in easy to understand tables and charts such as: mobile device shipments, NFC device shipments, NFC users, shipments of NFC interim solutions, NFC device usage, NFC transaction traffic, Average transaction values of NFC payments, NFC transaction fees and ARPU for both payments and retail marketing - split by mobile coupons & smart posters - all by eight key regions until 2014.

Based on an executive interviewing program with key players within the NFC market, the report discusses industry developments and then goes on to evaluate the impact, sizing the revenue opportunity for both mobile payments and mobile retail marketing.

Key questions the report answers:

• How much will NFC users spend on their NFC phones in the future?
• How many people will make payments using their NFC mobiles over the next five years?
• What will be the size of overall NFC transaction values?
• What is the ARPU opportunity for NFC mobile retail marketing?
• How does the ARPU compare between NFC payments and the NFC retail opportunity?
• How many NFC enabled devices will be shipped over the next five years?
• How many interim NFC solutions such as stickers and SD cards will be shipped over the next five years?
• Which will be the leading regions in the market in 2014?
• What are the trends, drivers and constraints affecting the development of the market?

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