Dutch Banks and Telcos Announce Plans for NFC Mobile-Payment JV

Sep 9 2010

The three largest banks and three largest mobile operators in the Netherlands today announced their intention to form a joint venture to launch mobile payment, using full NFC phones. 

The banks, ING, Rabobank and ABN Amro; and telcos, KPN, T-Mobile Netherlands and Vodafone Netherlands; have not yet specified a launch date, but say they plan a rollout sometime in 2012. The partners also are fine tuning plans for the payment applications they will offer and how they will roll out contactless terminals at the point of sale. And they plan to hire a CEO for the venture, which they will form next year, Arjan Bol, director of payments for ING bank, told NFC Times

As NFC Times reported earlier this summer, the Dutch banks and telcos gave the project the green light at a meeting June 28, following months of discussions. The venture by the three banks and three telcos–dubbed the six pack–would be a first of its kind among financial institutions and mobile operators, working together to roll out mobile payment.

"Holland is unique in that the main banks represent around 90% of the market and the telcos also 80% to 90% of the market, Bol told NFC Times. This way, you make sure both basically on the mobile side and acceptance side our customers can use their mobile phones for payments."

In a statement today, the joint venture said that for ease of use and security of mobile payment in the Netherlands, a "single, uniform system for mobile transactions" was needed, based on international standards. The group would be open to other banks, telcos and service providers. 

While telcos and banks in France have taken a coordinated approach to NFC mobile-payment standards and procedures and have jointly launched a small precommercial project in the city of Nice, they are not working as closely as the Dutch parties and have had difficulty working out how to share revenue. In the United States, major mobile operators have formed a joint venture and are pursuing their own plans for NFC-based mobile payment–without major U.S. banks or card networks. The U.S. telcos are also recruiting a CEO for their venture. U.S. banks, meanwhile, are starting to pursue their own contactless-mobile projects, using contactless stickers and microSD cards.

"It is the first time that major banks and mobile operators in a European country have joined forces with regard to mobile payments," stated the Dutch group. 

But the agreement by the Dutch banks and telcos to work together does not necessarily mean they have finalized a business model or finished hashing out how they will share revenue from the payment services they launch. Much of that will be done on a bilateral basis, ING's Bol indicated. 

"We have agreed on a starting point," he told NFC Times. "The dirty details are still in the making."

The banks have agreed to put the NFC payment applications onto SIM cards the telcos will issue, so they likely have agreed to some type of model in which banks would rent space for their payment applications on the telcos' SIMs. Bol declined to discuss models. ING has been designated to speak for the rest of the partners, a bank spokeswoman said.

There are still many unanswered questions for the project, however, especially how the parties will jump-start contactless payment, since a contactless-payment infrastructure is almost nonexistent in the Netherlands. Much of the discussions among the banks and telcos the past 12 months have concerned how to get contactless terminals rolled out, NFC Times has learned. Bol said the rollout of EMV payment in the Netherlands means merchants will have newer point-of-sale terminals installed, which can more easily be upgraded to accept contactless.

But the banks and telcos still have to convince merchants to accept contactless and, according to Bol, the banks have no plans for a separate contactless-card rollout that could use the same terminals. Banks may issue contactless cards separately, however, and ABN Amro is trialing cards.  

Despite the lack of NFC phones at present, Bol said the parties have confidence that enough compelling models will be available by the time they launch the service in 2012.

"We have had long discussions about that, and we basically (will go) all the way for the right thing (with full NFC). We will not use any bridges," Bol said.

The banks and telcos also have been in the market for a trusted service manager that could deliver the payment applications to secure chips in the phones. While the parties are likely to build an NFC platform to support multiple applications, it’s not clear yet whether one of those applications will be the Dutch contactless transit ticketing scheme.

For now, payment is the only definite application for the joint venture, which will likely support both MasterCard PayPass and Visa payWave contactless applications.

It’s (payment) a crucial starting point," Bol said. "Other applications will be added." 

As NFC Times reported earlier, the parties had planned to make a decision on whether to go forward with the project around April, but delayed it for more study.

HEADLINE NEWS

NXP Semiconductors Sues Marvell for Alleged Patent Infringement

Netherlands-based chip maker NXP Semiconductors has filed a patent infringement suit against rival chip maker, U.S.-based Marvell Semiconductor, which claims that Marvell infringed on four of its U.S. patents in chips sold to Microsoft for its Xbox One gaming console.

Spanish Airline Adds NFC Card Tapping to Mobile Booking App

Spanish airline Vueling has added an NFC feature to its mobile application, allowing users to tap a contactless card with an NFC handset to fill in part of their card data, which they could then use to book a flight with the app.

OTI Announces Wave Attachment for Taiwan, but Actual Deployment Small

Israel-based NFC vendor On Track Innovations has announced the deployment of its NFC-enabled Wave smartphone attachment in Taiwan, targeted for the iPhone, though only 10,000 units are being distributed, and Apple has not yet approved an iOS wallet app used with the devices for a planned mobile-payments service by Taiwanese banks, NFC Times has learned.

NFC Forum Working on Specification for Tags Supporting ISO 15693 Standard

NFC Times Exclusive – The NFC Forum is working on a tag Type 5 specification based on the ISO/IEC 15693 standard, NFC Forum executive director Paula Hunter has confirmed to NFC Times. She did not release a timeframe for publishing of the new specification, however.

Poland Seen as Testing Ground for HCE, Though Timetable for Commercial Launches Uncertain

NFC Times Exclusive Insight – With its high penetration of contactless POS terminals and strong use of contactless cards, payment networks, banks and telcos have seen Poland as a t

Broadcom Announces NFC Chip Aimed at Automotive Market as It Targets IoT

U.S.-based chip maker Broadcom announced it is sampling a new NFC chip targeting the automotive market.

Top 10 Misses for NFC in 2014; Project Backers Look to Recover Momentum in 2015

Jan 7 2015

NFC Times Exclusive – While the NFC industry saw a breakthrough in 2014 with the launch of Apple Pay, the year also was marked by a number of disappointments and missed opportunities.

Banking TSM Joint Venture Announces Launch of Service in Taiwan’s Fragmented NFC Market

NFC Times Exclusive Insight: TAIPEI, Taiwan – Taiwan’s banking joint venture, Taiwan Mobile Payment Co., as expected, announced the launch of its TSM service Tuesday, with at least 32 Taiwanese banks planning to make their Visa- and MasterCard-branded payment cards available to be downloaded and provisioned by the TSM.

Taiwan’s Telco TSM Joint Venture Announces Launch Plans, but Faces Market Challenges

Dec 30 2014

NFC Times Exclusive Insight: TAIPEI, Taiwan – Taiwan’s mobile operator TSM joint venture Thursday announced plans to launch NFC service in the second quarter, following a trial within the next few months–though it remains to be seen when the JV will be ready for a full-scale commercial launch.

RBC: HCE Pilot to Lead to 2015 Commercial Launch; But Bank Says it Will Keep Hybrid Payments Service

NFC Times Exclusive – The Royal Bank of Canada plans a commercial launch of host-card emulation in 2015 following a small employee pilot of HCE payments, but declined to specify a date, head of payments innovation Jeremy Bornstein told NFC times in an interview.

Mozido Acquires NFC and Wallet Vendor CorFire, Plans to Continue TSM

U.S.-based Mozido has acquired majority ownership of SK C&C USA, known as CorFire, giving the Austin-based supplier of cloud-based, white-label mobile payments and commerce products NFC technology.

Case Study: One Year on, Tim Hortons' HCE App Not Yet Available for Android Devices

NFC Times Exclusive – A year after its launch of closed-loop HCE NFC payments for BlackBerry 10 devices, Canadian-based coffee chain Tim Hortons has yet to roll out HCE for Android, continuing to offer only a bar-code-based version of the gift card service instead on non-BlackBerry platforms, although mobile app and HCE vendor Clearbridge Mobile says the BlackBerry launch received a positive response from customers.