HELSINKI:
The new technology which enables small payments from mobile phones by just
flashing the handset is likely to reach masses only around 2012, when one phone
from five sold will be equipped with the technology.
Consumers will be able to use
a phone as a wallet or as an access card simply by waving it over a wireless
reader — and in some cases punching a PIN number into the phone —
similar to how travellers in Tokyo and London access public
transport.
The technology is
ready and Nokia has introduced four products using it so far — but the
limited offering and high costs are hampering the take-up, which could help
transport firms to cut costs and cellphone makers to support
prices.
“When the 20%
level is reached it starts to feed itself.That is the critical point,”
Jukka Suikkanen, R&D manager at top Nordic telecom operator TeliaSonera,
told an industry seminar in
Helsinki.
Research firms
Strategy Analytics and ABI Research have forecast the 20% penetration would be
reached in 2012. Mikko Saarisalo, a technology manager at Nokia, declined to
comment on the outlook for the technology, but said 30% of phones enabled text
messaging (SMS) before it took
off.
ABI Research has forecast
6.5 million NFC (Near Field Communication) phones would be sold this year, up
10 fold from 2007, but the growth is hampered by costs stemming from an extra
chip needed in phones for data
security.
Nokia’s 6131
model sells for e139 in Finland, but for the NFC version of the same phone
retailers are asking up to e100 more. TeliaSonera’s Suikkanen said
additional costs are likely to start falling next year when operators start to
add security features to SIM
cards.
Strategy Analytics said
last month that despite support from all quarters of the industry NFC is likely
to remain largely limited to the trial phase this year. “The shortfall is
attributed to the slow ecosystem build-out, a half-hearted effort, at best, even
though there is visible progress in overcoming the technical and standardisation
challenges,” the research firm
said.
Last year Nokia and large
European and Asian carriers — including KPN, Maxis, O2, Orange, SingTel,
SKT and Wind — joined 14 mobile operators which initiated the project
earlier.
MasterCard is also
involved in the initiative, which is cheaper and much faster than other wireless
payment experiments, like those using SMS text
messages.
China Mobile,
Vodafone, Cingular — owned by AT&T and BellSouth — and
Telefonica already support the common wireless chip format on the mobile phones
they distribute for their
networks.
Together with NXP and
Sony, which pioneered the contactless chip called Near Field Communication,
companies plan a global standard for electronic wallets in mobile
phones.