The Mobile Payments and NFC Landscape: A U.S. Perspective
Publication Date: September 2011
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Man’s desire to communicate is as old as man himself, and even today, very few needs are stronger. The invention of communication devices such as the telegraph, the telephone, and particularly the mobile phone have affected how people live in ways that almost no one could have anticipated.
Another requirement almost as old as the need to communicate is the need to exchange things of value–commerce. Just as methods of communication have evolved over time, so have the methods and tools of commerce, from the development of commonly accepted currencies and the establishment of banks, to the evolution of today’s complex and robust payment networks that can validate and authorize transactions across thousands of miles in seconds.
The communication and commerce industries and their supporting technologies have evolved over the past century, changing most dramatically in the last 40 years. Combining the most recent technologies from both industries–mobile phones and e-commerce–results in a product that provides new capabilities and the freedom to conduct commerce in ways that would otherwise not be possible. This product is known as mobile payments.
The Smart Card Alliance developed this white paper to provide a snapshot of the mobile payments and NFC landscape in the U.S., including:
- A description of the different types of mobile financial applications in use today
- Discussion of the different mobile payments approaches with implementation examples
- A summary of the merchant, consumer, issuer, and mobile operator requirements for NFC mobile contactless payments and the attendant benefits
- An update on the status of Near-Field Communications (NFC) mobile contactless payments
- Evaluation of how different mobile payment approaches fulfill overall market requirements
Technology changes rapidly, and how it is ultimately applied is not always predictable. The goal of this white paper is simple: to provide a holistic view of mobile payments and the ecosystem currently supporting NFC mobile contactless payments. The hope is that this paper can help players in the industries directly involved, as well as observers and participants in secondary markets, understand the current mobile payments landscape, anticipate how mobile payments are likely to change, and appreciate the opportunities that mobile payments present.
About the White Paper
The Smart Card Alliance developed this white paper to provide an overview of the current state of the market for mobile payments and NFC-enabled payment applications in the U.S and to discuss the advantages and disadvantages of different mobile payment approaches. The white paper describes mobile financial applications in use today, discusses the different mobile payments approaches, provides an update on the status of NFC mobile contactless payments infrastructure in the U.S., and evaluates how different mobile payment approaches fulfill overall market requirements.
About the Smart Card Alliance Payments Council
The Smart Card Alliance Payments Council focuses on facilitating the adoption of chip-enabled payments and payment applications in the U.S. through education programs for consumers, merchants, issuers, acquirers/processors, government regulators, mobile telecommunications providers and payments service providers. The group is bringing together payments industry stakeholders, including payments industry leaders, merchants and suppliers, and is working on projects related to implementing EMV, contactless payments, NFC-enabled payments and applications, mobile payments, and chip-enabled e-commerce. The Council’s primary goal is to inform and educate the market about the value of chip-enabled payments in improving the security of the payments infrastructure and in enhancing the value of payments and payment-related applications for industry stakeholders. Council participation is open to any Smart Card Alliance member who wishes to contribute to the Council projects.