NXP announced this June 2nd that their PN544 NFC chipset is finally ready and available for sampling. That is the piece of information that the entire NFC ecosystem was waiting for since the GSMA officially announced that they backed Gemalto’s proposal to turn the SIM card into THE secure element! Now, handset makers will be able to start their NFC phone developments and finally flowd the market with SWP compliant handsets. Phones, phones, phones! It is said in the small NFC world that a carrier needs to propose a minimum of 3 NFC handsets to users to start launching their NFC services. That might well be (at long last) the beginning of it all.

Let’s not be too optimistic though, and let’s not underestimate the capacity of the NFC ecosystem to find themselves new problems that will delay the NFC market a little more. PN544 is almost a famous brand name, let’s hope it will be remembered as a main milestone for NFC.

I would like to comment on ping.ping, Belgacom’s initiative to launch NFC mobile payment in Belgium. They launched ping.ping a little over a month ago (after duly buying Tunz, originally a SMS-based mobile payment software start-up), and it did not make much noise, although I think what they are doing is a very smart move.

While everyone is awaiting the ever-delayed NFC phones, Belgacom’s team decided to make a bold move and whip the market a bit. They launched ping.ping (named after the shortest man on the planet – Chinese), which, for the end user, is a service that materializes as a RFID sticker on his phone, and an account on www.pingping.be.

The RFID sticker (Mifare DES-fire) is only an identifier. Merchants do have a NFC phone, but only to acquire the transaction. Merchants have a merchant ID, they the amount on they ping.ping mobile interface, and the whole batch of data goes online directly to the Belgacom servers. If the merchant’s service is activated for the user, and if the ping.ping account is loaded with enough cash, then the transaction is accepted. Yes, everything is done online. From the ping.ping website, end-users can chose which services/where they want to pay with ping.ping (parking, supermarkets, fast-food, etc.), and which account of theirs should be debited (bank account, Proximus phone bill, etc.). [How it works.pdf]

This is not our vision of NFC services, but still, Belgacom is creating a brand name, deploying services, creating habits, and – most importantly- growing a user base. And this is the beauty of the service: ping.ping sales force goes to a service provider, says a parking management company for example, they sign a deal, and Belgacom immediately grow their ping.ping user base by 30,000 people. These end-users trade-in their contactless parking card for a ping.ping sticker… They then can decide, once logged on the website, to subscribe to more ping.ping services.

So Belgacom is turning the hindrance created by the lack of phones into a competitive advantage: the longer the delay for NFC phones to be available, the larger the ping.ping user base. And when NFC phones are available in numbers, they’ll kindly propose their users to switch to “mobile ping.ping”. Brilliant! …and inexpensive (ping.ping pilot= 500 Mifare stickers vs. MNOs giving away 500 Nokia 6212 to their customers)

Cell Idea adds NFC to any Bluetooth phone
UPDATED: Consumers can simply pair the company’s new ‘With Me’ device, expected to retail at US$25, with their existing Bluetooth phone in order to NFC-enable their handset.

Hong-Kong based Cell Idea has launched ‘With Me’, an NFC device that adds near field communication functionality to any Bluetooth-equipped mobile handset.The device works by having the capability to both communicate with the phone using Bluetooth and communicate with any reader conforming to ISO 14443 Type A, Type B or FeliCa contactless communication standards for payments, loyalty applications, ticketing, access control and more.

And Toro is proudly to partner with Cell-Idea to provide our akami as the interface for With Me.

Cell Idea, which has also developed the NFC microSD solution used in Fonelabs’ new low-cost NFC phones, has produced two demonstration videos, using a loyalty and e-wallet application developed by Toro, that give a clear idea of how the phone/NFC device combination works and llustrates the potential functionality:

Even though “With Me” is not available to the consumer market yet, but we certainly think this will definitely give NFC market a big push, provide the real NFC user experience, after all, NFC will only take off if end-users really like it.

As of 2007, similar schemes are also in effect in other European cities, including Aix-en-Provence, Caen (V’eol), Rouen, Barcelona (Bicing), Bari, Brussels, Copenhagen, Luxembourg (Vel’oh), Lyon (Vélo’v), Nantes (Bicloo), Toulouse, Marseille Stockholm, Pamplona (Cemusa), OYBike, Call a Bike (Berlin, Frankfurt, Cologne, Stuttgart, Munich, Karlsruhe), Copenhagen/Helsinki/Aarhus (CIOS), Oslo, Sandnes, Seville (Sevici) and Vienna. Schemes have also been proposed for London, Melbourne and Dublin. However, it is remarkable that U-bike is probably the first bike hire program in the world where your standard transit pass card is used to hire the bikes as well, thus making them an extension of the city wide public transport system.

What is certainly interesting in the case of Taipei is that “U-bike” becomes the 4th application of the now ubiquitous EasyCard launched in 2002 and managed by TSCC (Taipei Smart Card Corporation, founded in 2000), after (1) MRT and buses, (2) public parking lots, and (3) park meters on the street. The 10 million contactless cards (Mifare technology) are getting more and more popular in the Taipei area, and close to reaching the popularity of its Hong-Konguee counterpart Octopus. Payment in taxis with Easycard was abandoned after a not-so-successful trial in year 2004, and is now replaced by the Visa Paywave application (see previous post).

Taiwan is definitely comforting its position to potentially become for world leader for NFC deployment, with the 3 main mobile network operators launching their NFC services at the end of 2009, and a number of contactless schemes and infrastructures the densest in the world: Easycard, Visa Paywave, MasterCard Paypass, JCB J/speedy, MOS burger, Q-pay (7-ELEVEN), and more to come.

With very attractive prices (1st 30 minutes: Free, and every additional 15 minutes: NT$ 10 (USD 0.3 or EUR 0.25)), hopefully the “U-bike” initiative will make life in Taipei easier and healthier, and help the case for a fast and massive adoption NFC !

The largest taxi company in Taiwan, Taiwan-taxi 台灣大車隊 turns to Visa Paywave for the payment of taxi fares that usually range from the minimum fee of NT$70 (US$ 2 - EUR 1.6) to NT$400 (US$ 12.5 - EUR 9.5). The case for contactless payment in taxi seems indeed quite obvious: fares represent small amounts, taxi drivers often carry little change, people are often in a hurry, coins often drop and get lost, transactions have to be done off-line, etc. So much so that, 3 years ago, the same company did a trial with TSCC and their EasyCard. It was however not so successful because the amount stored on the Easycard is intended for much lower fares (TSCC fare is around NT$20), thus creating a situation where people would not have enough money on their Easycard to pay for the taxi fare and no possibility to top-up.

Visa Paywave solves this problem as the transaction is directly debited from the client’s account after the taxi driver does his daily settlement.

Although Visa Paywave is getting most publicity from this implementation with Taiwan Taxi, other brands can also be acquiered by the China Trust (CTCB) POS contactless reader: J/speedy (JCB), Easycard (TSCC) and Q-Pay (7-ELEVEN + CTCB)

One taxi driver said to me: “1 out of 5 customers pay with their Visa Paywave card! Very convenient”.

One more reason to push for a commercial rollout of NFC in Taiwan

The majority of readers are being distributed in the UK, followed by Italy and Turkey, France, Germany, Poland, Spain and Switzerland. 2009 will be the year of contactless payments, touted Ayliffe, estimating that the Visa payWave contactless cards numbers in Europe will increase from the current 500,000 to seven million by the end of the year. At the same time, Visa’s rival MasterCard has made similar plans in Europe. MasterCard has recently teamed up with global retailer Carrefour to launch the Pass MasterCard contactless card in February across France. The card uses the MasterCard PayPass contactless technology and comes with both credit card and debit card features. At the end of Q3 2008, there were almost 44 million MasterCard PayPass cards and devices in the world.” in the PAYPERS, January 27, 2009.

These are definitely good news for the future of NFC. In Europe, one of the main issues for massive adoption of contactless payment was the fact that the market is organized in such a way that merchants have to pay for their own POS terminals. With Visa and Mastercard investing in contactless reader deployment, one of the deadlocks is now gone. Still remains the case for a clear business model with banks and MNOs. As in the rest of the world. Still very good news, though.

NearFieldCommunicationsworld.com just posted an article about the fast growing of NFC forum, talked about all the new members joined NFC forum and the upgraded membership recently. And TORO is among the new comers, just between Sagem Mobiles and Toshiba. You can see the article here.

Semiconductor Energy Laboratory has joined as a Principal Member alongside a long list of new Associate Members including American Banknote, Arygon, Atrua Technologies, Austriamicrosystems, China Mobile, Collis, Comprion, Human Chain, Integri, ITN International, JSC People’s Bank of Georgia, Kyocera Wireless, LGAI Technological Center, Mobile Payment Systems, Polaric, Sagem Mobiles, Toro, Toshiba, Tranzfinity, Trusted Logic, TwinLinx, Velo Information Technology (Shanghai), Venyon, Verband Deutscher Verkehrsunternehmen (VDV), Visa Europe and Vocalink.

A few comments about that piece of information:
1) Of course, such announcements are good for the NFC ecosystem because they draw everyone’s attention on NFC (the public, investors, other parties in the ecosystem, etc.).
2) When we have a closer look at who is involved in this ERGOSUM initiative, we see that the group of companies is formed of the 3 mobile operators on the one hand, and the big retailer’s financial arms on the other hand. So no actual bank is involved in ERGOSUM (because they are involved in the PEGASUS initiative…).
3) ERGOSUM is an initiative that comes from the “Pole de Competitivite: Retail industries”, a cluster of large retailers, located in the North of France. Explanation: To foster innovation, the French government setup 71 clusters all over the French territory. As a matter of fact, three of such clusters are waving the NFC flag. Each of these clusters has an NFC national initiative, which is somewhat confusing. Who is leading if there are 3 leaders?
4) The French government is behind these initiatives, which is good in a sense because they’ll put money into the development of NFC services, and possibly modify the law to make digitalization of payment and ticketing possible. However, this means that (1) the French are waiting for the government to really get moving and (2) here again, private initiative on the French territory has to be driven by the State, which will undoubtedly be synonymous of delays, round tables, local standards, centralized systems, shortlist of providers, lobbying, etc.
5) The French Government will probably have to setup a meta-initiative to coordinate the NFC ecosystem and their different “leading initiatives”: ERGOSUM, PEGASUS/ PAYEZ-MOBILE/AEPM, and ULYSSES… That is going to be fun… and long.
6) It always works like that in France. Sometimes it works, so let’s hope that is going to be the case. And let’s hope there will be room for smaller players as well.

Today is a big day for Romanian,because it’s the official date of their first NFC pilot in Romania , and it’s also a big day for TORO, because TORO is playing an important part in this pilot, along with ING, MasterCard, Collis and Venyon. This is definitely a milestone for TORO.
And here are two photos from the press conference, you can see Akami’s interface and Toro’s Logo in the photos!!!

Here is the press release from ING and MasterCard.

ING and MasterCard introduce Mobile Maestro PayPass in Romania

ING and MasterCard® Worldwide today announce the first program to offer ING Romanian clients a complete mobile payment package - the ability to set up payment capability, make transactions and feed their accounts - all using their mobile phone. The product is based on Maestro® PayPass™, a MasterCard contactless payment product designed for small purchases. The pilot contributes to the ING goal of making financial services easier for its customers. ING entered the Romanian retail banking market in 2004. Due to the success of the Self’Bank concept, ING Retail Romania today has captured significant market share.

ING is the first bank in the world to offer its clients Maestro PayPass on a mobile phone with over-the air download of account information and over-the-air top-up of the Maestro PayPass balance. Clients may use a special code to top up the balance of the Maestro PayPass on the phone. A client simply taps the phone on specially-equipped terminals at the point of sale for a quick, safe payment without signatures or receipts. The mobile phone acts like a prepaid card, and is ideal for small purchases such as a coffee, a movie ticket or a newspaper.

ING will select approximately 500 Romanian clients for the first stage of the pilot program. Participants will receive a new Nokia 6212 that incorporates Near Field Communication (NFC) technology. NFC technology provides the wireless communication between the phone and the retailers’ terminals. ING and MasterCard Worldwide developed the product in partnership with Collis, Toro and Venyon. The product will initially be used at approximately 30 participating merchant locations in Bucharest and will last six months.