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French mobile operators, banks and vendors say they are finally ready for a nationwide launch of NFC payments this year, a move that follows years of preparations. 

And among the issues the players have had to deal with along the way have been interoperability doubts that persisted at least into the spring of this year.

Telcos France Telecom-Orange, SFR, along with Bouygues Telecom, and banks BNP Paribas and Crédit Mutuel-CIC plan to move their NFC projects from a few local deployments to the national stage this year. 

The operators have been seeding the market with NFC phones and, to a lesser extent, NFC SIM cards. About 40 NFC models have been available in mobile shops that can work with the French “Cityzi” NFC SIM cards and more than 3.5 million of the phones have been sold to date. 

Orange and, more recently, SFR, say they have also been issuing NFC SIM cards to new subscribers and by the end of the year, Bouygues and a mobile virtual network operator are expected to begin issuing the standard SWP-SIMs.

BNP Paribas and Crédit Mutuel-CIC are expected to begin signing up customers for their mobile-payment services at branches in various parts of the country this fall, though nationwide promotion might not start later in the year or early next year. Two other large French banks, Société Générale and La Banque Postale, are expected to follow with their own NFC payment launches.

And since last year, all new point-of-sale terminals have come with contactless readers, though many are not yet activated. But by the end of 2013, French banks estimate there will be around 200,000 active terminals that accept Visa payWave and MasterCard PayPass. Some estimates place the forecast at 300,000.

NFC-enabled transit and other local services might launch in a few more cities, with help from government funding, but most transit ticketing commercial projects won’t start until next year, including a hoped-for launch of mobile NFC ticketing in the Paris region. The focus for this year for the national rollout is on payment.

Interoperability Issues
But despite France’s pioneering role in setting global interoperability standards for NFC and the launch of its groundbreaking multioperator, multivendor trial in May of 2010 in the southern French city of Nice, doubts have persisted even into this spring about whether French TSM platforms and SIM cards from different vendors could work together.

NFC Times has learned that the major French telcos and banks, through their respective associations, AFSCM and AEPM, sought assurances from the two major French vendors supplying technology for the national launch, Gemalto and Oberthur Technologies. The vendors were persuaded by the telco and banking group members in April to jointly sign a letter committing that their technologies would be interoperable.

The operators and banks wanted to know that the NFC SIM cards from one vendor would work with the competitor’s TSM platform, and vice versa, said sources. There were also questions about whether a service provider TSM hired by a bank would communicate well with the TSM managing the SIM cards for a mobile operator–if those two TSM platforms come from different vendors. 

Representatives of French mobile operators, banks and vendors told NFC Times that they are now confident that the TSMs and SIMs will be interoperable for the national rollout. They add that among the reasons for the concerns were that banks had asked for more control over how their applications are managed on operator SIM cards. This greater control for banks and their TSMs was not available as a feature on SIMs used in the earlier NFC trials. Supporting the feature required more development work.

Still, it is telling that after years of work drafting and agreeing to detailed specifications and rules, the French ecosystem still has had difficulty proving it can be interoperable. And the interoperability doubts call into question the scalability of the so-called “split-TSM” model, in which each bank and telco or secure element owner hires its own TSM.

Up until recently, French telcos have been buying both their SIM cards and TSM services from the same vendors–Orange France from Gemalto, and SFR and Bouygues from Gemalto’s chief rival, Oberthur.

Orange and possibly SFR have more recently expanded their list of NFC SIM vendors, but doubts were such that French telcos and banks felt it necessary not only to have written assurances of interoperability from the two vendors but also to hold meetings with them to specifically discuss the topic, including one held in early April, sources told NFC Times.

Some observers believe competitive issuers were at the root of the interoperability concerns–with neither vendor keen to work closely with their rival, in an effort to sell more of their own SIMs and TSM services. 

Winston Yeo, vice president for mobile financial services at France-based Gemalto, attributed any problems to different implementations of the specifications by the vendors. He downplayed the importance of meetings held to discuss issues related to the rollout and interoperability.

“For me, it’s not too much of a surprise because sometimes there are areas (that) different companies interpret (in the specification) differently, hence that’s why you have a platform like this, meetings to clarify,” he told NFC Times. “But, for sure, Gemalto is committed to making sure that the TSM, it’s working with multiple secure element vendors.”

Arnaud de La Chapelle, managing director of the solutions business unit at Oberthur, noted that NFC technology is complex, and it will work “only if it’s based on standards, if it’s demonstrated as being interoperable, and we make things simpler.

“So, in order to make things simpler, we need to show cases where we interoperate,” he said, noting that Oberthur, serving as TSM for Société Générale bank, involved in NFC service in the eastern French city Strasbourg, demonstrated such interoperability. “We were connected with (TSMs for) two French mobile operators, one from Oberthur Technologies and one from another supplier, and we managed to successfully deploy NFC services on Oberthur Technologies SIM cards and (SIMs) from another supplier, being the first TSM supplier demonstrating the end-to-end interoperability of its NFC offer.”

The other supplier de La Chapelle was referring to was Gemalto.

Other vendors, such as France-based Safran Morpho, are also offering NFC SIMs and possibly TSM services in France or plan to do so and would need to make their offerings fully interoperable with those of their competitors.

Getting the interoperability right for the national launch will be vital going forward, since, all told, at least four mobile operators and more than 10 banks, transit operators and other service providers in France already are setting up their own TSMs with vendors or are in the process of doing so. And each of these service providers TSMs will need connections with the TSMs for the mobile operators and the telcos' SIM cards.

Telcos and service providers in other countries will be watching how the French deal with this complexity as NFC rolls out, though more payments organizations and telcos appear to be forming TSM hubs or aggregators to try to reduce the number of interconnections and the complexity that this brings.