Strategies for mobile network operators, handset manufacturers, financial institutions, third party service providers — and their potential customers

NFC Business Models cover image

NFC Business Models sets out the tasks involved in creating a commercially successful NFC infrastructure and provides readers with the latest thinking in terms of both the strategies available and the most likely routes to success.

This research report gives detailed guidance on the lessons learned to date, the questions that need to be addressed as you formulate your plans and the options available for mobile network operators, handset manufacturers, financial institutions, industry suppliers and others looking to build new revenues from the provision of NFC services.

This report is essential reading for anyone involved in planning or specifying an NFC platform or service.

NFC Business Models provides a step-by-step guide to the key issues you will face as you plan your offering:

  • Developing a business model for an NFC infrastructure. The business functions that must be performed, the roles and responsibilities of the different players in the market, how to create a specification of requirements, who should participate in the planning process and the ownership options available.
  • Business models for secure element issuers. The options available to mobile network operators, handset manufacturers, financial institutions, technology providers and other organisations seeking to generate revenues from the provision of NFC services to other businesses and to government.
  • NFC in payments. The payments processing opportunity, generating new revenues from advertising, the business case for banks and other card issuers, persuading merchants to switch to contactless terminals.
  • Beyond payments — gaining buy-in from service providers. What services will be required? What drives consumer adoption? The six key vertical markets that have most to gain from NFC and how to build a business around their needs.
  • Launch strategies. Building critical mass, choosing the right bridging technologies, target consumer demographics, the key service providers required to succeed in phases one, two and three of a commercial rollout.

The author of NFC Business Models is Sarah Clark, editor of NFC World and a technology analyst with more than twenty years experience. The conclusions and recommendations contained in NFC Business Models are based on interviews with leading industry players around the world, on extensive desk research and on information gathered during the writing of NFC World over the last two years.

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This report forms part of The NFC Report, a major international research project that examines the business, the technology, the applications, the players and the future of the NFC market.

For best value, order The NFC Report for just £1,497 (approx US$2,511/€1,818) and you will get NFC Business Models (list price £797), The NFC Market 2012 (list price £997) and NFC Technologies and Systems (list price £997) — all included as part of The NFC Report.

Table of contents

  1. Executive summary
    1. Key findings
  2. Developing a business model for an NFC infrastructure
    1. The 19 key business requirements of an NFC infrastructure
    2. Types of NFC infrastructure
      1. Single MNO, single card issuer
      2. Single MNO, multiple card issuers
      3. Multiple MNOs, multiple card issuers
      4. Multiple MNOs, multiple types of service provider — the central TSM approach
        1. Is it sensible to put this much power into the hands of one entity?
        2. Can one TSM be all things to all people?
        3. The central TSM model creates added costs
      5. Multiple MNOs, multiple types of service provider — the decentralized TSM approach
      6. Multiple types of secure element issuer, multiple types of service provider
        1. Advantages of an open NFC infrastructure
        2. Issues to be resolved
    3. Identifying roles and responsibilities
      1. Standards bodies
      2. Government
      3. Mobile network operators
      4. Secure element Issuers
      5. Service providers
      6. Trade bodies
      7. Merchants
      8. Consumers
      9. Handset manufacturers
      10. NFC add-on and standalone device manufacturers
      11. Trusted Service Managers (TSMs)
      12. NFC solutions providers
      13. NFC component suppliers
      14. The NFC Infrastructure Manager
    4. Developing a specification of requirements for an NFC infrastructure
      1. A 21 point checklist for NFC infrastructure planners
      2. Who should take part in the planning process?
      3. Who should manage the planning process?
    5. NFC infrastructure ownership options
      1. A single commercial entity
      2. Single issuer/single service provider joint ventures
      3. Vertical market joint ventures
      4. Multi-industry joint ventures
      5. Multi issuer/multi service provider joint ventures
      6. National not-for-profit ventures
      7. Distributed, fully open NFC infrastructures
        1. The Singapore example
  3. Business models for secure element issuers
    1. Business models for mobile network operators
      1. The provision of B2B NFC services via an NFC SIM
        1. The rental model
        2. The hotel/serviced office model
        3. The co-ownership model
        4. The wholesale model
        5. The strategic partnership model
        6. The joint venture model
        7. The co-branded model
        8. The service provider-subsidized model
      2. Generating revenues from new services
        1. Mobile operators as financial services providers
          1. In the developed world
          2. The BRIC nations and other developing economies
          3. In the developing world
          4. Acquisitions of financial services providers are a potential route to market
        2. Other services
        3. Reducing churn
      3. Barriers to adoption of NFC SIMs
        1. Dedicated handsets are required
        2. Widespread consumer adoption will require a wide range of commercially available SWP NFC handsets
        3. 100% consumer adoption of NFC is required for some key service providers
        4. Potential high cost base for non-commercial NFC applications
        5. Technical issues remain to be resolved
      4. Alternative secure element options for mobile network operators
    2. Business models for banks, TSMs and other third party secure element issuers
      1. The retail distribution model
      2. The retail partnership model
      3. The direct to consumer model
      4. The MVNO model
    3. Business models for handset manufacturers
      1. How Apple could make NFC pay
        1. iPay, iBuy and iCoupons
        2. The mobile payments patents
        3. Products+
        4. Concert Ticket+
        5. iTravel
        6. iKey
        7. Connected lifestyles
      2. How Nokia could make money from NFC
        1. How it works
        2. Coupons and special offers
        3. Advantages
      3. The wholesale business model for embedded secure elements
      4. Hybrid embedded secure element business model
      5. Business models for devices with multiple secure elements
      6. Alternative form factors
  4. NFC in payments
    1. Types of NFC payments instrument
      1. Debit products
        1. Debit cards
        2. Alternative and enhanced debit products
      2. Stored value products
        1. Universal electronic cash accounts
        2. Bringing online stored value accounts offline
        3. Existing contactless stored value cards
      3. Credit products
        1. Credit cards
        2. Alternative and enhanced credit products
      4. Bill to mobile
    2. Will consumers pay for NFC payments services?
    3. The payments processing proposition
      1. Existing payments processors
      2. New entrants
      3. Increasing transaction volumes
        1. Replacing cash
        2. Recruiting new merchants
        3. Serving the unbanked
        4. But will payments alone be enough?
          1. The London O2 Wallet trial
          2. The Discover sticker trial
          3. The Citi trial in Bangalore
          4. The Telefonica/La Caixa trial in Spain
      4. Reducing fraud
      5. Cutting costs
      6. Adding value to merchant services
      7. Generating revenues from advertising and marketing
        1. Highly targeted mobile marketing campaigns
        2. Location-based advertising
        3. NFC for social networks
        4. NFC for brands
      8. Providing TSM services
      9. Seizing market share
    4. The NFC proposition for banks and other card issuers
      1. Cost structures
        1. Integration costs
        2. Device functionality required
        3. Service and management costs
      2. Adding value to bank and card accounts
      3. Protecting existing business
      4. Is EMV the best NFC solution for banks and card issuers?
        1. Contactless stickers
        2. Stored value products
        3. Direct funds transfers to merchants
      5. Will NFC reduce card issuing costs?
    5. The merchant proposition
      1. Lower transaction processing costs
        1. ‘All you can eat’ transaction charges
        2. Lower cost terminals
        3. Cutting out the middleman
      2. Reduced cash handling costs
        1. Will electronic payments be cheaper than handling cash?
      3. Increase membership of loyalty programmes
      4. Improve customer service
      5. Multi-channel integration
      6. Could leading merchants become TSMs?
    6. Mass transit operators are NFC merchants too
  5. Gaining buy-in from consumers and service providers
    1. Consumer adoption drivers
      1. Save time
      2. Save money
      3. Have fun
      4. Reduce stress
      5. Convenience
      6. It’s cool
    2. NFC device requirements
      1. NFC phones
        1. Low and flat battery mode
        2. Instant locking of a lost or stolen phone’s NFC functions
        3. Fast transaction times
        4. Operating range
        5. Chargeable action prompts
        6. NFC on/off switch
        7. Dual tasking
        8. Tampered tag prompt
        9. Audible/haptic transaction indicator
        10. Simple user interface
        11. All other current generation mobile phone features
      2. Alternative NFC devices
      3. NFC add-ons for existing mobile phones
      4. Dedicated NFC devices
    3. Building new businesses by targeting specific demographics — and their service providers
    4. Commuters
      1. The USP
      2. Services required
      3. Device requirements
    5. Business travellers
      1. The USP
      2. Services required
      3. Device requirements
    6. Young urban professionals and students
      1. The USP
      2. Services required
      3. Device requirements
    7. Household budget holders
      1. The USP
      2. Services required
      3. Device requirements
    8. The unbanked
      1. The USP
      2. Service requirements
      3. Device requirements
    9. Tourists
      1. The USP
      2. Services required
      3. Device requirements
  6. Launch strategies
    1. Strategic positioning options
      1. Going it alone
      2. Competitive partnerships
      3. Cooperative partnerships
      4. Open infrastructures
      5. Early adopter or fast follower?
    2. Single function deployments
    3. Geographically targeted deployments
      1. First wave NFC services
      2. Second wave NFC services
      3. Third wave NFC services
    4. Demographically targeted deployments
  7. Index

How much does this report cost?

You can buy NFC Business Models for £797 (approx US$1,337/€968).

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You can buy The NFC Report for £1,497 (approx US$2,511/€1,818) and you will get NFC Business Models, The NFC Market 2012 and NFC Technologies and Systems.

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