NFC Retail Marketing & Mobile Payments

Overview

-    Expert Evaluation of NFC Retail & Payments
-    NFC ARPU Opportunities Analysed
-    Three Extensive Forecast Chapters

This board level evaluation of the rapidly developing NFC market delivers the most extensive appraisal of the industry to date.  Across three detailed forecast chapters this report provides a strategic blueprint for companies and market planning professionals aiming to maximise on the growing opportunities within NFC retail marketing and NFC mobile payments.

Three Forecast Chapters: Forecast chapter one projects data for NFC mobile payments including the average number of NFC transactions per handset as well as the number of transactions and transaction value, with all data broken down into NFC ticketing and NFC retail payments. The second forecast chapter projects the market for NFC retail marketing, forecasting the number of NFC Coupons and Smart posters downloaded as well as the total fee value.  The third forecast chapter forecasts the ARPU opportunity for NFC Ticketing, Retail payments, Mobile Coupons and Smart posters.

Breadth & Depth of Analysis: From tracking key market developments over the past 12 months this report covers 18 significant industry announcements, assessing the relative prospects for NFC and evaluating eight key regions.  The report concludes with vendor briefs of 14 players in the market with Juniper’s view of their strengths and strategic development opportunities.

Table of Contents

Executive Summary

1. Mobile Commerce: Definition and Segments

1.1 Introduction    19
Figure 1.1: Verizon Wireless Network Challenges    20
1.2 NFC’s Pivotal Role in Shopping    20
Figure 1.2: The Mobile Device in the Retail Customer Journey    21
1.3 Mobile Commerce Market Segments    21
Figure 1.3: Mobile Commerce Market Segmentation    22
1.4 Mobile Payment Segments    22
1.4.1 Digital & Physical Goods (Remote Payment)    23
1.4.2 Contactless NFC (POS or Proximity Payment)    23
1.4.3 Mobile Money Person to Person Transfer (Remote Payment)    24

2. NFC & FeliCa Technology

2.1 Introduction    25
2.2. Near Field Communication (NFC)    25
2.2.1 Technology    25
Figure 2.1: Typical NFC Implementation    27
2.2.2 NFC Forum Interview    27
Figure 2.2: NFC in the Automotive Industry    28
Figure 2.3: Oyster Card Using MIFARE Technology    28
Figure 2.4: Uses of NFC    29
Figure 2.5: N Mark Logo    29
2.2.3 Security    30
2.2.4 NFC in the Device    30
i. Embedded    30
ii. SIM    30
2.2.5 Interim NFC Form Factor Solutions    31
Figure 2.6: Integration Phase Comparison – NFC and Mobile Broadband    31
i. NFC Stickers    31
Figure 2.7: Twinlinx My-Max NFC Sticker    31
ii. NFC SD Card    32
Figure 2.8: Giesecke & Devrient NFC SD Card    32
Figure 2.9: DeviceFidelity In2Pay microSD NFC Solution    32
iii. NFC Case or Sleeve for Smartphones    33
Figure 2.10: NFC Case for iPhone    33
iv. SIM Card Adaptations    33
v. NFC POS Merchant Payment Device Adaptations    34
Figure 2.11: VeriFone PAYware Mobile Enterprise    34
2.3 FeliCa    34
2.3.1 Introduction    34
2.3.2 Standards & Specification    35
Figure 2.12: Sony FeliCa IC Card and Reader/Writer    35
2.3.3 Security    35
Figure 2.13: Sony FeliCa Security Features    35
Figure 2.14: FeliCa Networks Platform Management    36
2.3.4 Uses    37
Figure 2.15: Uses of FeliCa    37
2.3.5 Future FeliCa Roadmap    37
Figure 2.16: FeliCa to Global Mobile NFC Roadmap    37

3. NFC & FeliCa Drivers and Constraint

3.1 Summary    39
Figure 3.1: NFC Drivers and Constraints    39
3.2 NFC Drivers    39
3.2.1. Customer Response    39
3.2.2 Transaction Efficiency & Growth    40
3.2.3 Infrastructure Availability    41
3.2.4 MNO Plans and Successes    41
3.2.5 Future Enhancements    41
3.2.6 Widespread NFC Applications    41
3.2.7 Queue Busting    42
3.2.8 One to One Marketing    42
3.2.9 Smartphone Growth    42
3.3 Constraints    43
3.3.1 Device Availability    43
3.3.2 Business Model    43
Figure 3.2: NFC Ecosystem Top Level View    43
3.3.3 Service Complexity and Management    44
Figure 3.3: NFC Ecosystem Detailed View    45
3.3.4. Ecosystem Incentivisation    45
3.3.5 POS Acceptance    45
3.3.6 POS Reader Capability    46
3.3.7 User Support    46
3.3.8 Regulatory Hurdles    46

4. NFC Market Developments

4.1 Introduction    48
4.2 Mobile Operators    49
4.2.1 GSMA    49
4.2.2 ISIS (USA)    49
4.2.3 France Telecom Orange    50
i. Orange Strategy    50
ii. Cityzi Pilot    50
Figure 4.1: Cityzi Mobile Ticketing    51
4.2.4 Telefonica, Visa & La Caixa (Spain)    51
Figure 4.2: Sitges Mobile Shopping    52
4.2.5 Osaifu-keitai (Japan)    52
i. FeliCa Services    52
Figure 4.3: Osaifu-Keitai Service Concept    53
ii. NTT DOCOMO and KT    53
4.2.6 MasterCard, Gemalto, Garanti Bank and Avea (Turkey)    54
4.2.7 Orange, Telefonica and Vodafone    54
4.2.8 Deutsche Telekom (Germany)    54
4.3 Handset Vendors    54
4.3.1 Google    54
4.3.2 RIM    55
4.3.3 Samsung    55
Figure 4.4: Samsung Galaxy SII    55
4.3.4 Further Vendors    56
4.4 POS Vendors    56
4.4.1 Ingenico    56
Figure 4.5: Ingenico Tellium Pass Plus NFC POS Terminal    56
4.4.2 VeriFone    56
Figure 4.6: VeriFone VX Evolution POS Device    57
4.5 Banks & Financial Institutions    57
4.5.1 Bank of America    57
Figure 4.7: Bank of America NFC BlackBerry    57
4.5.2 Barclaycard & Orange (UK)    57
4.5.3 Visa Europe & Wireless Dynamics    58
Figure 4.8: Wireless Dynamics iCarte Accessory for iPhones    58
4.6 Retailers & Merchants    59
4.6.1 McDonald’s    59
4.6.2 ATM & Telecom Italia (Italy)    59
4.7 Regional Prospects    59
Figure 4.9: Market Development Prospects 2011-2012 for 8 Key Regions    60

5. NFC Market Forecasts: Ticketing and Payments

5.1 Introduction    61
5.1.1 NFC Payments    61
5.1.2 New NFC Retail Marketing Opportunities    62
5.2 Methodology    62
5.2.1 Approach and Assumptions    62
Figure 5.1: NFC Market Forecast Methodology    64
5.2.2 Main Changes Since Previous Forecast    64
5.3 Mobile Handset Forecast    65
Figure 5.2: Mobile Handset Base (m) Split by 8 Key Regions 2011 – 2016    65
Table 5.1: Mobile Handset Base (m) Split by 8 Key Regions 2011–2016    66
5.4 NFC Smartphones Forecast    66
Table 5.2: NFC Commercial Launches by Country 2011-2012    67
Figure 5.3: NFC Smartphones (% of Total Handsets) Split by 8 Key Regions 2011-2016    68
Table 5.3: NFC Smartphones (% of Total Handsets) Split by 8 Key Regions 2011-2016    68
Figure 5.4: NFC Smartphones (m) Split by 8 Key Regions 2011-2016    69
Table 5.4: NFC Smartphones (m) Split by 8 Key Regions 2011-2016    69
5.5 NFC Featurephones & Low Cost Handsets Forecast    70
Figure 5.5: NFC Featurephones & Low Cost Handsets (m) Split by 8 Key Regions 2011-2016    70
Table 5.5: NFC Featurephones & Low Cost Handsets (m) Split by 8 Key Regions 2011-2016    70
5.6 Total Native NFC Handsets    71
Figure 5.6: Total NFC Handsets (m) Split by 8 Key Regions 2011-2016    71
Table 5.5: NFC Featurephones & Low Cost Handsets (m) Split by 8 Key Regions 2011-2016    71
Figure 5.6: Total NFC Handsets (%) Split by 8 Key Regions 2011-2016    72
Table 5.6: NFC Handsets (%) Split by 8 Key Regions 2011-2016    72
5.7 Interim NFC Solutions Forecast    73
Figure 5.7: Total Number of Mobile Handsets (m) With Interim NFC Capability  Split by 8 Key Regions 2011-2016    74
Table 5.7: Total Number of Mobile Handsets (m) With Interim NFC Capability  Split by 8 Key Regions 2011-2016    74
5.8 NFC Native Handsets& Interim Solutions    74
Figure 5.8: Global Comparison: NFC Handsets vs. Interim Solutions (m) 2011-2016    75
Table 5.8 Global Comparison: NFC Handsets vs. Interim Solutions (m) 2011-2016    75
5.9 NFC Enabled Devices in Use    75
Figure 5.9: Percentage of Native NFC Handsets in Use Split by 8 Key Regions 2011-2016    76
Table 5.9: Percentage of Native NFC Handsets in Use Split by 8 Key Regions 2011-2016    77
Figure 5.10: Native NFC Handsets in Use (m) Split by 8 Key Regions 2011-2016    77
Table 5.10: Native NFC Handsets in Use (m) Split by 8 Key Regions 2011-2016    78
Figure 5.11: NFC Handsets in Use as % of All Mobile Handsets Split by 8 Key Regions 2011-2016    78
Table 5.11: NFC Handsets in Use as % of All Mobile Handsets Split by 8 Key Regions 2011-2016    79
Figure 5.12: NFC Handsets & Interim Solutions in Use (m) Split by 8 Key Regions 2011-2016    79
Table 5.12: NFC Handsets & Interim Solutions in Use (m) Split by 8 Key Regions 2011-2016    80
5.10 NFC Mobile Ticketing Transactions Traffic    80
5.10.1 Average Number of NFC Ticketing Transactions    80
Figure 5.13: Average Number of NFC Ticketing Transactions per User p.a.  Split by 8 Key Regions 2011-2016    81
Table 5.13: Average Number of NFC Ticketing Transactions per User p.a.  Split by 8 Key Regions 2011-2016    82
5.10.2 Total Number of NFC Ticketing Transactions    82
Figure 5.14: Total Number of NFC Ticketing Transactions (m) p.a.  Split by 8 Key Regions 2011-2016    82
Table 5.14: Total Number of NFC Ticketing Transactions (m) p.a.  Split by 8 Key Regions 2011-2016    83
5.11 NFC Ticketing Transaction Value    83
Figure 5.15: Average Value of NFC Ticket Transactions ($) Split by 8 Key Regions 2011-2016    83
Table 5.15: Average Value of NFC Ticket Transactions ($) Split by 8 Key Regions 2011-2016    84
Figure 5.16: Total Value of NFC Ticketing Transactions ($m) Split by 8 Key Regions 2011-2016    84
Table 5.16: Total Value of NFC Ticketing Transactions ($m) Split by 8 Key Regions 2011-2016    85
5.12 NFC Retail Payments Transaction Traffic    85
5.12.1 Average Number of NFC Retail Payments Transactions    85
Figure 5.17: Average Number of NFC Retail Payments Transactions per User p.a.  Split by 8 Key Regions 2011-2016    86
Table 5.17: Average Number of NFC Retail Payments Transactions per User p.a.  Split by 8 Key Regions 2011-2016    86
5.12.2 Total Number of NFC Retail Payments Transactions    87
Figure 5.18: Total Number of NFC Retail Payments Transactions (m) p.a.  Split by 8 Key Regions 2011-2016    87
Table 5.18: Total Number of NFC Retail Payments Transactions (m) p.a.  Split by 8 Key Regions 2011-2016    87
5.13 NFC Retail Payments Transaction Value    88
Figure 5.19: Average Value of NFC Retail Payments Transactions ($)  Split by 8 Key Regions 2011-2016    88
Table 5.19: Average Value of NFC Retail Payments Transactions ($)  Split by 8 Key Regions 2011-2016    89
Figure 5.20: Total Value of NFC Retail Payments Transactions ($m)  Split by 8 Key Regions 2011-2016    89
Table 5.20: Total Value of NFC Retail Payments Transactions ($m)  Split by 8 Key Regions 2011-2016    90
5.14 NFC Total Ticketing and Retail Transaction Traffic    90
Figure 5.21: Total Number of NFC Ticketing and Retail Payments Transactions (m) p.a.  Split by 8 Key Regions 2011-2016    90
Table 5.21: Total Number of NFC Ticketing and Retail Payments Transactions (m) p.a.  Split by 8 Key Regions 2011-2016    91
5.15 NFC Total Ticketing and Retail Payments Transaction Value    91
Figure 5.22: Total NFC Ticketing and Retail Payments Transaction Value ($m) p.a.  Split by 8 Key Regions 2011-2016    91
Table 5.22: Total NFC Ticketing and Retail Payments Transaction Value ($m) p.a.  Split by 8 Key Regions 2011-2016    92

6. NFC Retail Marketing Forecasts: Coupons & Smart Posters

6.1 NFC as a Retail Device    93
Figure 6.1: NFC Mobile Coupon    93
Figure 6.2: Suipo Smart Poster    94
6.2 NFC Mobile Coupons Download Traffic    95
Figure 6.3: Total Number of NFC Mobile Coupons Downloaded (m)  Split by 8 Key Regions 2011-2016    95
Table 6.1: Total Number of NFC Mobile Coupons Downloaded (m)  Split by 8 Key Regions 2011-2016    96
6.3 NFC Mobile Coupons Total Fee Value    96
Figure 6.4: NFC Mobile Coupons Total Fee Value ($m) p.a. Split by 8 Key Regions 2011-2016    97
Table 6.2: NFC Mobile Coupons Total Fee Value ($m) p.a. Split by 8 Key Regions 2011-2016    97
6.4 NFC Smart Poster Download Traffic    97
Figure 6.5: Total Number of NFC Smart Poster Downloads (m)  Split by 8 Key Regions 2011-2016    98
Table 6.3: Total Number of NFC Smart Poster Downloads (m) Split by 8 Key Regions 2011-2016    98
6.5 NFC Smart Posters Total Fee Value    98
Figure 6.6: NFC Smart Posters Total Fee Value ($m) p.a. Split by 8 Key Regions 2011-2016    99
Table 6.4: NFC Smart Posters Total Fee Value ($m) p.a. Split by 8 Key Regions 2011-2016    99

7. NFC ARPU Opportunity

7.1.1 NFC Mobile Ticketing Interchange Fee ARPU    101
Table 7.1: NFC Ticketing Transaction Interchange Fee ARPU ($)  Split by 8 Key Regions 2011-2016    101
Figure 7.1: NFC Ticketing Transaction Interchange Fee ARPU ($)  Split by 8 Key Regions 2011-2016    102
7.1.2 NFC Retail Payment Interchange Fee ARPU    102
Figure 7.2: NFC Retail Payment Transaction Interchange Fee ARPU ($)  Split by 8 Key Regions 2011-2016    102
Table 7.2: NFC Retail Payment Transaction Interchange Fee ARPU ($)  Split by 8 Key Regions 2011-2016    103
7.2 NFC Retail Marketing    103
7.2.1 NFC Mobile Coupon Fee ARPU Opportunity    103
Figure 7.3: NFC Mobile Coupons Fee ARPU ($) Split by 8 Key Regions 2011-2016    103
Table 7.3: NFC Mobile Coupons Fee ARPU ($) Split by 8 Key Regions 2011-2016    104
7.2.2 NFC Smart Posters Fee ARPU Opportunity    104
Figure 7.4: NFC Smart Posters Fee ARPU ($) Split by 8 Key Regions 2011-2016    104
Table 7.4: NFC Smart Posters Fee ARPU ($) Split by 8 Key Regions 2011-2016    105
7.4 NFC ARPU Opportunity Comparison    105
Figure 7.5: NFC Incremental ARPU Opportunity ($) Split by Coupons, Smart Posters,  Ticketing, Retail Payments 2011-2016    105
Table 7.5: NFC Incremental ARPU Opportunity ($) Split by Coupons, Smart Posters,  Ticketing, Retail Payments 2011-2016    106

8. Appraisals of Selected Vendors

8.1 Introduction    107
8.2 Broadcom    107
Figure 8.1: Topaz Tags    108
8.3 Fundamo    109
8.4 Gemalto    111
8.5 Giesecke & Devrient    113
8.6 More Magic    115
8.7 Nokia    116
Figure 8.2: Nokia 2010 Device Volumes by Region (millions)    116
8.8 NXP    117
8.9 Oberthur Technologies    119
8.10 Proxama    120
8.11 Research in Motion (RIM)    122
8.12 Samsung    123
8.13 Think&Go NFC    124
8.14 VeriFone    125
8.15 ViVOtech    126

Companies Referenced

7-Eleven, America Movil, American Express, AT&T Mobility, ATM, Avea, Axiata Group Berhad, Bank of America, Barclaycard, Barclays, Best Buy, Bharti, BJ's, BKM (Bankalararasi Kart Merkezi - Interbank Card Center), Bouygues, Broadcom, CHARGE Anywhere, China Unicom, CVS, Deutsche Telekom, DeviceFidelity Inc., Duane Reade, EPC, ETSI, FeliCa, Fundamo, G&D, Garanti Bank, Gemalto, Giesecke & Devrient, Google, GSMA, Gulf Oil, Hess, Ingenico, ISIS, KT Corporation, La Caixa, LG, MasterCard, McDonalds, Meijer's, More Magic, MTS, Nokia, NRJ Mobile, NTT DoCoMo, NXP, Oberthur Technologies, Orange, Proxama, Qtel Group, RIM, Samsung, SFR, Sheetz, Shop-Rite, SK Telecom, SoftBank Mobile, Sony, Telecom Italia, Telefonica, Telekom Austria Group, Telenor, TfL (Transport for London), The Home Depot, Think&Go NFC, Tim Horton's, T-Mobile USA, Twinlinx, Venyon, VeriFone, Verizon Wireless, Visa Inc., Visa Europe, ViVOtech, Vodafone, Watchdata, Wegman, Whataburger, Wireless Dynamics

Extra Info

‡ 8 key regions includes:

North America, Latin America, Western Europe, Central & Eastern Europe, Far East & China, Indian Subcontinent, Rest of Asia Pacific and Africa & Middle East.