Get ready to pay with your mobile phone

By Amit Roy Choudhury

SINGAPORE - Do you have a bulging wallet filled with plastic cards that you use to make payments? Well, come early 2012 you can throw them all away. All you'll need is your mobile phone.

Thanks to a new form of wireless mobile payment service, for which a Call For Collaboration (CFC) was issued yesterday, users will be able to use their phones to make a wide variety of payments simply by holding the phone in front of card readers.

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If all goes well, the target date for commercial roll out of what is known as Near Field Communications (NFC), which is a secure form of short-range wireless technology built on open standards, will be February 2012.

Once the network is up and running it will be able to take care of both credit card payments as well as most CEPAS e-payment services using FlashPay and ez-link cards.

The CFC stems from an initiative under the Next Generation e-Payment Programme administered by the Infocomm Development Authority of Singapore (IDA) to accelerate the proliferation and adoption of mobile payment services using NFC technology.The CFC is expected to help form a consortium of which the centrepiece would be what is called a TTP, or Trusted Third Party, entity.

The TTP would serve as the neutral party which would connect the banks/payment providers and other service providers to the mobile operators.

'This would allow mobile subscribers to access any service of choice and not be limited by who his mobile operator is partnered with,' Tan Eng Pheng, senior director, IDA, told BT.

Mr Tan noted that the challenge for the company coming in as the TTP would be to not only be the neutral party but also to be seen as being the neutral party.

'For TTP, neutrality plays a crucial part in gaining the trust of banks and mobile operators, besides having the technical abilities to meet the criteria set out for its roles,' Mr Tan said.

The consortium would also have to have at least two mobile operators or 55 per cent of the mobile subscriber base in Singapore covered.

The CFC requirements is an open access business model. The party which wins will have to give a commitment to have transparent commercial pricing, accessibility to service offerings, non-exclusive arrangements, and non-discriminatory practices.

According to the timelines given by IDA, the CFC would be awarded by May-June 2011. The grouping which wins, would then be expected to launch the service by February 2012 with at least two PSPs (payment service providers) and two mobile operators on board. It would also have to have two NFC mobile payment services in operation by then.

By August 2012, another NFC mobile payment service would need to be added plus one NFC value- added service.

The next deadline would be February 2013 by which two more PSPs would be added plus two more NFC mobile payment services and two NFC value-added services.

By February 2014, the full service should be up and running and the service provider would have to give an assurance to keep the service running in the same format till 2017.

By 2017, the interoperable NFC ecosystem would be mature enough to be self-sustaining.

IDA will co-fund the development of the TTP infrastructure. Given the market size in Singapore, an independent consultant had opined that only one TTP would be sustainable in the initial stage.

One major limitation as of today is that NFC payment cannot be used for travel on trains and buses.

IDA has set up a working group with LTA to look into the feasibility and solutions to enable the acceptance of NFC mobile payment on public transport.

Additionally, through this CFC, IDA is requiring the selected consortium to collaborate with IDA and LTA to work toward the deployment of NFC mobile payment services on public transport.

Speaking to BT, NETS CEO Poh Mui Hoon said her organisation welcomes the announcement. 'We believe NETS is well positioned to play the role of the TTP.'

Explaining, Ms Poh noted that her organisation is trusted by banks in Singapore and the region.

'It is a natural extension of our existing card centre business and we have the necessary technical connections to the banks and telco providers,' she added.

In its first reaction to the proposal, Pranav Seth, OCBC Bank's head of e-business told BT: 'As we are always at the forefront of providing our customers with innovative banking services, this is an initiative that we are actively studying to see how we can embrace this payment system.'

Cassie Fong, corporate communications manager, StarHub, said her organisation is evaluating the CFC paper. 'We are pleased that Singapore is gearing up for an open, interoperable platform for mobile NFC transaction and payment service,' she said.

A SingTel spokesman added: 'SingTel is reviewing the IDA's CFC for the deployment of interoperable mobile near field communication infrastructure and payment services.

'SingTel is constantly looking to offer our customers the best products and services that technology has to offer. In 2007, we launched Singapore's first trials of NFC technology.'

This article was first published in The Business Times.

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