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GSMA endorses wireless mobile payments

Slow crawl towards near field comms

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3GSM Demonstrations of proximity payment systems, allowing users to pay for products with wave of the phone, have been around for years, and every year we're promised that this time it's really going to happen.

Developments at 3GSM this week might show more progress in that direction, but there's still a long road to be travelled.

Fourteen mobile operators around the world have teamed up to create a standard payment system using Near Field Communications (NFC).

To be called "Pay-Buy Mobile", the standard is backed by AT&T and China Mobile, among others, and should lead to interoperability between suppliers' equipment and financial companies.

The NFC Forum takes care of the radio communications standards necessary to facilitate mobile payment, but doesn't get involved in the logistical structure of managing financial transactions. The GSMA has recently mapped out how that structure might look, through various white papers and guidance to members.

Proximity payment enthusiasts often point to the FeliCa system, operating successfully in Japan, which allows customers to install the EDY payment system onto their phones, enabling them to pay for small purchases, and (critically) public transport, with a wave of their handset.

FeliCa handsets are now sold by all the Japanese networks, though NTT DoCoMo was the driving force behind it. As an investor in BitWallet, which owns and runs the EDY system, and FeliCa itself, NTT DoCoMo has a real interest in promoting the system, and with its expansion into banking it has also established a revenue stream.

And it is the revenue stream which is still causing problems for operators elsewhere - they are going to have to pay for the hardware through handset subsidy, and so far their opportunity to recoup that investment is hard to pin down.

At 3GSM Nokia demonstrated the Nokia 6131 NFC, a handset featuring integrated NFC and applications to manage them. We'll be getting a couple at Vulture Central and will let you know what we think. But even when handsets do come along (and the NFC Forum were promising several manufacturers would have integrated handsets by the end of 2008), network operators are going to have to believe they can make money out of NFC, and proximity payments, if the technology is going to go anywhere. ®

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