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Dutch payment-by-bonkers bonk payments on the head

Phone networks flee incoming Google, Apple NFC onslaught

Top three mobile application threats

The Dutch mobile operator-banking consortium, formed to create a level-playing field for pay-by-wave NFC technology, has broken up.

The move leaves networks free to compete while customers wait to see what Apple will offer them.

The Dutch consortium intended to provide a consistent platform for wireless NFC app makers, such as banks and loyalty schemes, so their software could work across all operators provided the developers paid a rent to securely store data in punters' SIM cards.

However, agreeing on the details was taking too long, and NFC Times reports that the plan has been abandoned.

T-Mobile had already quit, deciding the pack of six would be happier as a group of five. In December those remaining stalled the project by a year, admitting that the platform wouldn't launch until 2013. Now it won't launch at all.

The concept is valid: operators want NFC applications stored on SIM cards, but the banks aren't going to create a new application for each operator's SIM. Creating a national consortium is quite sensible. That's why the Americans have banded together to create ISIS, and the UK operators are pushing for Project Oscar. Google and PayPal are staying on the side shouting "illegal collusion" to whomever will listen.

Google has its own secure element, and wants mobe owners to think of their Android phone (and Google's cloud) as their wallet, not their operator-issued SIM. Google could port its wallet code to ISIS or Oscar, but that would prevent it from collecting all the transactional information it needs to run targeted offers and vouchers - a service that advertisers must pay for.

Oscar and ISIS are also planning to make money from those vouchers. Team ISIS even has a new set of videos showing how its system will work for the hard of thinking. The brains behind NFC envisaged companies, such as network operators, making money by taking a cut on every transaction, but the financial giants (Visa & Mastercard) scotched that plan pretty fast: the card behemoths pointed out that their cut will not be shared. That left the industry looking for a revenue stream, and vouchers were the next-available option.

These money-off offers are not dominated by giants like Visa and Mastercard, but Groupon isn't to be sneered at. This is also Google's home turf, not to mention Apple's latest foray into the arena with the blogosphere now certain the September-billed iPhone 5 will feature NFC hardware.

If the mobile network operators are going to have any chance against Apple, Google and the rest then they're going to have to create a standard platform. The European Union looks set to give Project Oscar the go ahead, so it's a worrying development that the Dutch couldn't get it together.

Without a coherent competitor the operators will lose control of mobile payments just as they lost control of ring tones, mobile applications, video calling and (increasingly) voice and text messaging, leaving them with little to do beside sell data by the byte. ®

Top three mobile application threats

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