RIM ruffles operator features with NFC play
Whose customers are they anyway?
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RIM is the latest manufacturer to pitch NFC as something that bypasses network operators to the advantage of manufacturers, rather to the annoyance of said operators.
The Wall Street Journal has been talking to network operators in Canada and America who are unhappy with RIM's plan to embed an NFC secure element into Blackberry handsets rather than providing a connection to the operator's SIM chip. That locks the customer into RIM‘s infrastructure rather than the network operators‘, and that threatens the handsome handset subsidy operators currently provide on Blackberry handsets.
The paper quotes CEO of EnStream (a cross-operator payment scheme set up in Canada) Robin Dua, who claims that his company had been trying to get RIM to see sense for a while, but ultimately admitting, "I think it's going to be a little bit of a fight, frankly", as the manufacturer and network operator vie for ownership of the customer.
At issue is who holds the keys to the secure module requisite to the use of Near Field Communications (short-range radio) for payments. Google's Nexus S handset, for example, has an embedded secure module under the control of the chocolate factory, and a link to the SIM (using the Single Wire Protocol, SWP) which allows the network operator to provide an additional secure module. Nokia's C7 goes even further and provides no secure module at all, being entirely dependent on the operator to provide one in the SIM.
Whomever controls the secure model can decide what applications can be installed – so if Visa, or Oyster, or Barclays want to provide a downloadable payment application, then they have to go to the owner of the secure module for permission (and digital signing). The choice of secure module also impacts the user experience – a SIM changes handsets when the user does, but the new handset might come as a user changes network operators.
That complexity has driven the US operators to endorse Isis, while the banks promote a removable module embedded in a microSD card. The removable card makes it independent from the network operator and the handset manufacturer, but at the cost of additional hardware.
According to The Wall Street Journal, RIM plans to embed its secure element in the handsets, and does not plan to support the SWP. That cuts operators out of the loop, and will make them reluctant to cough up the subsidy that keeps Blackberrys cheap. So a threat on their part to leave may be enough to make RIM change its mind. ®
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COMMENTS
"threatens the handsome handset subsidy operators currently provide"
Bullshit. Don't put the operators in such a good light.
The customer pays for EVERYTHING.
And because the customer gets it on credit, they pay interest on it too.
Mayhem made in heaven - it's bad enough selecting a smartphone, now there's an added twist
Why RIM would chose to go the solo route, given it's less than dominant position in the market, is not clear. It claims to be the business smartphone and businesses tend to be a little fixed in their ways.
On the other hand Google , in providing SWP access, at least provides a little flexibility.
The part of the NFC equation not addressed are the merchants, most of whom have card swipe terminals, and their relationships with Discovery, Mastercard and Visa cards.
Many people travel, in the past 11 days I have been to 4 countries which would also impinge on any decision as to which technology suits.
It's like the Betamax/VHS battle all over again, except this time there are more choices to be made.
Apple, for once. might have made a smart decision in opting to sit this round out by not incorporating NFC yet.
NFC is dead
No doubt this will be resolved with multiple payment standards and methods - everyone will be happy, they'll all think that they have a piece of the pie and nobody will use it because they'll have no idea who they are paying.
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