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NFC Mobile Payments & Retail Marketing

NFC Mobile Payments & Retail Marketing

Business Models & Forecasts 2012-2017

Publisher: Juniper Research
Date Published: 29/05/2012
Category: Mobile Commerce
No of Pages: 138
Coverage: Global ~ 8 Key Regions
 

Overview

  NFC Retail Business Models Evaluated

  Exclusive NFC Vendor Matrix

  Enhanced Forecast Suite

This fourth edition assessment of the NFC Retail Market & Mobile Payments industry provides an in-depth analysis of the NFC Retail Payments market ecosystem, highlighting the primary business models which have emerged and the key drivers behind recent growth.

What this report covers

The report examines the roles played by network operators, financial institutions, OTT providers and retailers, and through a series of case studies explores the opportunities for each of these players. It also includes a vendor matrix which offers an assessment of selected vendors that are active in the NFC Mobile Commerce space, summarising player capability. This is accompanied by vendor profiles which conclude with Juniper’s views of the key strengths and strategic development opportunities for each vendor.

Expert analysis is backed up by interviews with and commentaries from leading players across the NFC value chain, including Ericsson, Gemalto, NXP, the SIM Alliance, Giesecke & Devrient and VeriFone. It also includes a series of strategic recommendations designed to enable service providers to maximise their opportunity in this fast evolving market.

Market forecasts. Based on a combination of primary research interviews with leading industry participants and secondary research, Juniper also provides regional (and, in an accompanying Excel dataset, national) forecasts of:

 

  NFC handset adoption

  NFC retail transaction volumes and values

  Operator Retail payment management revenues

  NFC coupon and ticketing volumes

 

Readers can also benefit from the accompanying NFC Mobile Payments & Retail Marketing 2012-2017 Excel.  This dataset offeres an additional layer of granularity, splitting NFC handset adoption by 36 countries and including 46 tables and nearly 3,000 data points.

 

Table of Contents

Executive Summary

 

1. NFC Retail Payments, Definitions, Context & Segmentation

1.1 Introduction 17
1.2 NFC’s Pivotal Role in Retail 17
Figure 1.1: The Mobile Device in the Retail Customer Journey 18
1.3 Mobile Commerce 18
Figure 1.2: Mobile Commerce Market Segmentation 18
1.3.1 Mobile Payments 19
i. Mobile Money Transfer 19
ii. Point of Sale (POS) Payment 19
1.3.2 Mobile Retail Marketing 20
i. Mobile Advertising 20
ii. Mobile Coupons & Vouchers and Mobile Loyalty 20
1.3.3 The Holy Grail of Mobile Retail Marketing & Payments 20
1.4 NFC Market Players 21
Figure 1.3: The NFC Retail Payments Ecosystem 21
i. Mobile Network Operators (MNO) 21
ii. Financial Institutions 22
iii. Handset manufacturers (OEMs) 22
iv. Technology providers 22
v. Merchants 22
vi. Consumers 22

2. NFC Trends, Drivers & Constraints

2.1 Introduction 24
2.2 Overview 25
Figure 2.1: NFC Payment Trends, Drivers & Constraints 25
2.3 Trends 26
2.3.1 NFC Handset Market Growth 26
2.3.2 NFC Technology Solution Maturity 26
2.3.3 NFC Security Issues Resolution 27
2.3.4 NFC/Contactless Infrastructure Rollout 27
Figure 2.2: NFC Mobile Ticketing Market Synergies 27
2.4 Drivers 28
i. Case Study: Google Wallet 29
ii. Google Wallet: Verifone NFC POS 29
iii. Google Wallet: CorFire NFC TSM 29
Table 2.1: NFC Launches by Country 2011-2012 30
Figure 2.3: Ericsson Networked Society City Index 31
i. Case Study: Singapore IDA 32
2.5 Constraints 33

3. The NFC Ecosystem & Business Models

3.1 Introduction 37
3.2 The NFC Ecosystem 37
Figure 3.1: The NFC Payments Ecosystem 38
3.2.1 Acquirer 38
3.2.2 Payment Network Provider 38
3.2.3 Personalisation Bureau 39
3.2.4 Wallet Developer 39
3.2.5 OS Provider 39
3.2.6 Value Added Service Provider 39
3.3 The NFC Business Model 39
3.3.1 The “Keys” Issue 39
3.3.2 Consortia Status 40
i. “Single Player” Consortia 40
ii. Two Party Consortia 40
iii. MNO-led Consortia 40
iv. “Integrated” Consortia 41
Figure 3.2: Cityzi Branding 41
v. Conclusion 41
3.3.3 MNOs 42
i. MNOs and the SIM SE 42
ii. MNO Advantages 42
iii. MNO Initiatives 42
iv. MNO Example: ISIS 42
Figure 3.3: ISIS MNO-led Consortium Positioning 43
Figure 3.4: ISIS Mobile Wallet Screenshot & Retailer Logo 43
v. Conclusion 43
3.3.4 Financial Institutions 44
i. Financial Institution Constraints 44
ii. Financial Institution Imperatives 44
iii. Financial Institution and the microSD SE 44
Figure 3.5: GOTrust microSD NFC SE 45
iv. Visa Europe Interview 45
v. Conclusion 46
3.3.5 OTT & OEMs 46
i. Background 46
ii. OTT 47
iii. OEMs 48
iv. Apple 48
Figure 3.6: Apple iWallet Patent 49
v. Conclusion 49
3.3.6 Retailers 49
i. Background 50
ii. The Retailer Value Proposition 50
Figure 3.7: The Retailer NFC Proposition 51
iii. Potential Retailer Influencers 51
iv. Retailer-led Initiatives 52

4. NFC-Enabled Handset Forecast

4.1 Introduction 53
4.2 Methodology 53
Figure 4.1: NFC Retail Payments Market Forecast Methodology 54
4.3 Mobile Handset Forecast 55
Figure 4.2: Mobile Handset Base (m) Split by 8 Key Regions 2012 – 2017 55
Table 4.1: Mobile Handset Base (m) Split by 8 Key Regions 2012–2017 56
4.4 NFC Smartphones Forecast 56
Figure 4.3: NFC Smartphones (% of Total Installed Base of Handsets) Split by 8 Key Regions 2012-2017 56
Table 4.2: NFC Smartphones (% of Total Handsets) Split by 8 Key Regions 2012-2017 57
Figure 4.4: NFC Smartphones (m) Split by 8 Key Regions 2012-2017 57
Table 4.3: NFC Smartphones (m) Split by 8 Key Regions 2012-2017 58
4.5 NFC Featurephones & Low Cost Handsets Forecast 58
Figure 4.5: NFC Featurephones & Low Cost Handsets (m) Split by 8 Key Regions 2012-2017 58
Table 4.4: NFC Featurephones & Low Cost Handsets (m) Split by 8 Key Regions 2012-2017 59
4.6 Total Native NFC Handsets 59
Figure 4.6: Total NFC Handsets (m) Split by 8 Key Regions 2012-2017 59
Table 4.5: Total NFC Handsets (m) Split by 8 Key Regions 2012-2017 60
Figure 4.7: Total NFC Handsets (%) Split by 8 Key Regions 2012-2017 60
Table 4.6: NFC Handsets (%) Split by 8 Key Regions 2012-2017 61
4.7 Interim NFC Solutions Forecast 61
Figure 4.8: Total Number of Mobile Handsets (m) With Interim NFC Capability  Split by 8 Key Regions 2012-2017 62
Table 4.7: Total Number of Mobile Handsets (m) With Interim NFC Capability  Split by 8 Key Regions 2012-2017 62
4.8 NFC Native Handsets & Interim Solutions 63
Figure 4.9: Global Comparison: NFC Handsets vs. Interim Solutions (m) 2012-2017 63
Table 4.8 Global Comparison: NFC Handsets vs. Interim Solutions (m) 2012-2017 63

5. NFC Retail Payments Forecast

5.1 NFC-Enabled Payment Users 65
5.1.1 Native NFC Handsets in Use for Payments 65
Figure 5.1: Percentage of Native NFC Handsets in Use Split by 8 Key Regions 2012-2017 65
Table 5.1: Percentage of Native NFC Handsets in Use Split by 8 Key Regions 2012-2017 66
Figure 5.2: Native NFC Handsets in Use for Payments (m) Split by 8 Key Regions 2012-2017 67
Table 5.2: Native NFC Handsets in Use for Payments (m) Split by 8 Key Regions 2012-2017 67
Figure 5.3: NFC Handsets in Use as % of All Mobile Handsets Split by 8 Key Regions 2012-2017 68
Table 5.3: NFC Handsets in Use as % of All Mobile Handsets Split by 8 Key Regions 2012-2017 68
5.1.2 All NFC-Enabled Handsets in Use for Payments 68
Figure 5.4: NFC Handsets & Interim Solutions in Use for Payments (m) Split by 8 Key Regions 2012-2017 69
Table 5.4: NFC Handsets & Interim Solutions in Use for Payments (m) Split by 8 Key Regions 2012-2017 69
5.1.3 Native NFC Handsets in Use for Payments by SE Controller 70
i. MNO-Controlled Payment Users 70
ii. FI-Controlled Payment Users 70
iii. OTT-Controlled Payment User 70
Figure 5.5: Native NFC Handsets in Use for Payments (m) by SE Controller 2012-2017 71
Table 5.5: Native NFC Handsets in Use for Payments (m) by SE Controller 2012-2017 71
5.2 NFC Retail Payment Transactions 72
5.2.1 Average Number of NFC Retail Payments Transactions 72
Figure 5.6: Average Number of NFC Retail Payments Transactions per User p.a.  Split by 8 Key Regions 2012-2017 72
Table 5.6: Average Number of NFC Retail Payments Transactions per User p.a.  Split by 8 Key Regions 2012-2017 73
5.2.2 Total Number of NFC Retail Payments Transactions 73
Figure 5.7: Total Number of NFC Retail Payments Transactions (m) p.a.  Split by 8 Key Regions 2012-2017 73
Table 5.7: Total Number of NFC Retail Payments Transactions (m) p.a.  Split by 8 Key Regions 2012-2017 74
5.3 NFC Retail Payments Transaction Value 74
5.3.1 Average NFC Retail Payment Transaction Value 74
Figure 5.8: Average Value of NFC Retail Payments Transactions ($)  Split by 8 Key Regions 2012-2017 75
Table 5.8: Average Value of NFC Retail Payments Transactions ($)  Split by 8 Key Regions 2012-2017 75
5.3.2 Total NFC Retail Payments Transaction Value 76
Figure 5.9: Total Value of NFC Retail Payments Transactions ($m)  Split by 8 Key Regions 2012-2017 76
Table 5.9: Total Value of NFC Retail Payments Transactions ($m)  Split by 8 Key Regions 2012-2017 76
5.4 MNO NFC Retail Payment Management Revenues 77
5.4.1 Total MNO NFC Retail Payment Management Revenues 77
i. Initial Provisioning Fees 77
ii. Annual SE Rental Fees 77
iii. Customer Care Fees 77
Figure 5.10: Total MNO NFC Retail Payment Management Revenues ($m) Split by 8 Key Regions 2012-2017 78
Table 5.10: Total MNO NFC Retail Payment Management Revenues ($m) Split by 8 Key Regions 2012-2017 79
5.4.2 MNO Incremental NFC Retail Payment ARPU Opportunity 79
Figure 5.11: MNO NFC Retail Payment Incremental ARPU Opportunity ($) Split by 8 Key Regions 2012-2017 79
Table 5.11: MNO NFC Retail Payment Incremental ARPU Opportunity ($) Split by 8 Key Regions 2012-2017 80

6. NFC Metro Ticketing Forecast

6.1 Introduction 81
6.2 Metro Ticketing 81
6.3 NFC Metro Ticketing Forecasts 82
6.3.1 Methodology 82
Figure 6.1: NFC Ticketing Methodology 83
6.3.2 NFC Metro Ticketing Users 84
Figure 6.2: Mobile Phone Users (%) Who Wish to Use NFC Metro/Bus Mobile Ticketing  Split by 8 Key Regions 2012-2017 84
Table 6.1: Mobile Phone Users (%) Who Wish to Use NFC Metro/Bus Mobile Ticketing Split by 8 Key Regions 2012-2017 84
6.3.3 NFC Metro Ticketing Transactions 84
Figure 6.3: Average Number of NFC Metro Ticketing Transactions per User p.a.  Split by 8 Key Regions 2012-2017 85
Table 6.2: Average Number of NFC Metro Ticketing Transactions per User p.a.  Split by 8 Key Regions 2012-2017 85
Figure 6.4: Total Number of NFC Metro Ticketing Transactions (m) p.a.  Split by 8 Key Regions 2012-2017 86
Table 6.3: Total Number of NFC Metro Ticketing Transactions (m) p.a.  Split by 8 Key Regions 2012-2017 86
6.3.4 NFC Metro Ticketing Transaction Value 87
Figure 6.5: Average Value of NFC Metro Ticket Transactions ($)  Split by 8 Key Regions 2012-2017 87
Table 6.4: Average Value of NFC Metro Ticket Transactions ($)  Split by 8 Key Regions 2012-2017 87
Figure 6.6: Total Value of NFC Metro Ticketing Transactions ($m)  Split by 8 Key Regions 2012-2017 88
Table 6.5: Total Value of NFC Metro Ticketing Transactions ($m)  Split by 8 Key Regions 2012-2017 88

7. NFC Coupons Forecast

7.1 Introduction 89
Figure 7.1: Mobile Coupon Delivery Options 89
7.2 NFC Coupons 90
Figure 7.2: Jiepang NFC Smartposter 90
7.3 NFC Coupons Forecasts 91
7.3.1 Methodology 91
Figure 7.3: Outline Mobile Coupon Forecast Methodology 92
7.3.2 Mobile Coupons Users By Mobile Marketing Channel 93
Figure 7.4: Mobile Coupon Users (m) Split by Mobile Marketing Channel 2012-2017 93
Table 7.1: Total Number of Mobile Coupon Users (m) Split by Mobile Marketing Channel 2012-2017 93
7.3.3 NFC Mobile Coupons Issued 94
Figure 7.5: Number of NFC Coupons Issued Per Annum (m) Split by 8 Key Regions 2012-2017 94
Table 7.2: Number of NFC Coupons Issued Per Annum (m)  Split by 8 Key Regions 2012-2017 94
7.3.4 Mobile Coupons Issued By Mobile Marketing Channel 95
Figure 7.6: Mobile Coupons Issued (%) Split by Mobile Marketing Channel 2012-2017 95
Table 7.3: Mobile Coupons Issued (%) Split by Mobile Marketing Channel 2012-2017 95

8. Vendor Analysis & Matrix

8.1 Vendor Landscape 97
Figure 8.1: NFC Mobile Commerce Vendor Types 97
8.2 Vendor Analysis 98
8.2.1 Vendor Assessment Criteria 98
Table 8.1: Vendor Capability Assessment Factors 98
8.2.2 Limitations and Interpretation 99
8.3 Vendor Positioning Matrix Results 100
8.3.1 Overall Matrix Position 100
Figure 8.2: Global NFC Mobile Commerce Positioning Matrix 100
8.3.2 Vendor Groupings 100
i. Summary 100
ii. On Track Vendors 100
iii. Vendors Exceeding Expectations 101
iv. Vendors with Further Potential 101
8.4 Vendor Profiles 102
8.4.1 CorFire 102
8.4.2 Ericsson 104
Figure 8.3: Ericsson TSM leveraging IPX Managed Service 105
8.4.3 Gemalto 105
8.4.4 Giesecke & Devrient 108
8.4.5 MoreMagic 109
8.4.6 Nokia 110
8.4.7 NXP 112
8.4.8 Oberthur Technologies 114
8.4.9 Proxama 115
8.4.10 VeriFone 117

9. NFC Technology, Infrastructure & Industry Groups

9.1 NFC 121
9.2 The NFC Retail Payments Technology Solution 122
9.2.1 NFC Technology 122
Figure 9.1: NFC Retail Payments Logical Architecture 122
i. NFC Controller 123
ii. Secure Element 123
iii. Application Environment 123
iv. User Interface 123
v. Wide Area Modem 123
vi. Contactless Payment (POS) Terminal 123
9.2.2 The Secure Element 123
Figure 9.2: Handset Physical Architecture including Secure Element Options 124
i. SIM SE 124
ii. Embedded SE 124
iii. MicroSD removable SE 124
9.2.3 The Trusted Service Manager (TSM) 125
Figure 9.3: Simple NFC Payment Provisioning Architecture 125
Figure 9.4: The Role of the Trusted Service Manager 125
Figure 9.5: The Operation of the Trusted Service Manager 126
9.2.4 Interim NFC Technology Solutions 126
Figure 9.6: Integration Phase Comparison – NFC and Mobile Broadband 127
i. Stickers 127
Figure 9.7: Twinlinx My-Max NFC Sticker 127
ii. MicroSD Cards 127
Figure 9.8: Giesecke & Devrient NFC SD Card 128
iii. NFC Case or Sleeve for Smartphones 128
Figure 9.9: NFC Case for iPhone 128
9.3 NFC Industry & Trade Groups 128
9.3.1 GSMA 129
i. GSMA Mission 129
Figure 9.10: GSMA NFC SIM Concept 129
ii. GSMA Interview 129
iii. GSMA Activity 130
9.3.2 NFC Forum 131
Figure 9.11: Uses of NFC 132
Figure 9.12: N-Mark Logo 132
9.3.3 SIMalliance 133
i. Organisation & Membership 133
ii. SIMalliance Interview 133
Figure 9.13 Worldwide SIM Shipments 2010 vs 2009 134
9.3.4 GlobalPlatform for NFC 134
Figure 9.14: SIM Security Domains 134
Figure 9.15: GlobalPlatform SE Specification Programme 135
9.3.5 Mobile Marketing Association 135
i. MMA Focus 135
ii. MMA Interview 135

Companies Referenced

Profiled
Corfire; Ericsson; Gemalto; Giesecke & Devrient; MoreMagic; Nokia; NXP; Oberthur Technologies; Proxama; VeriFone
Case Studies
Google Wallet; Singapore IDA
Mentioned
Aeroexpress; Amazon; Ambiq; América Móvil; American Eagle Outfitters; Apple; AT&T; AVEA; Axiata; Group Berhad; AXIS; Barclaycard; Bharti; Bloomingdale's; Bouygues Telecom; Capital One; Chase; China Telecom;China Unicom; Citi; CorFire; CSL; Deutsche Telekom; Dubai Roads & Transport Authority; eBay; Elisa Corporation; Emirates Integrated Telecommunications Company PJSC (du); Ericsson; Etisalat; European Payments Council; Everything Everywhere; Facebook; First Data; Globe;  Telecom; Google; KPN; KT Corporation; Macy's; MasterCard; Maxis; Mobily; Moscow Metro; MTS; New York Metropolitan Transit Authority; NFC Forum; Nokia; Orange; PayPal; Proximus; Qtel Group; RadioShack; Renfe; Rogers Communications; Samsung; Saudi Telecom Company (STC); Second Life; SFR; SIMalliance; SK Telecom; Smart; Softbank Mobile; Sprint; Subway; Target; Telecom Italia; Telecom New Zealand; Telecom Slovenije; Telefonica; Telekom Austria Group; Telenor; TeliaSonera; Telus; TMN; T-Mobile USA; Toys"R"Us; Turkcell; Verifone; Verizon; VimpelCom; VIVA Bahrain; Vodafone; Walgreens; Wal-Mart
Interviewed
CorFire; Eagle Eye Solutions; Ericsson; Giesecke & Devrient; GSMA; Mobile Marketing Association; MoreMagic; NXP; SIMalliance; VeriFone; Visa Europe

Extra Info

‡ 8 key regions includes:

North America, Latin America, Western Europe, Central & Eastern Europe, Far East & China, Indian Subcontinent, Rest of Asia Pacific and Africa & Middle East.

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Please see: NFC Mobile Payments Market Update Business Models & Forecasts 2012-2017

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Key Questions

1. How much will the mobile NFC retail payments market be worth by 2017?
2. What strategies should players across the value chain employ to maximise their opportunities?
3. How has increased competition stimulated the NFC retail space?
4. What are the key constraints on NFC retail deployment and adoption?
5. Which markets offer the greatest medium-term potential for NFC retail?
6. Who are the major players in NFC retail and payments?
7. What are the prospects for NFC ticketing and couponing?
8. What are the ARPU opportunities associated with NFC?
9. How has the NFC ecosystem evolved over the past year?
10. How many consumers will be using NFC handsets in five years’ time?

Any Questions about this report please contact us.

 

Related Reports:

The NFC Mobile Payments Briefing 2012-2017, NFC Mobile Payments & Retail Marketing Excel

Related Categories: Mobile Commerce

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