PARIS–The series of recent announcements by major mobile-handset makers of plans to build Near Field Communication technology into the next generation of phones represents the critical element needed to ignite mobile-payments development next year, contends Mohammed Kahn of Vivotech Inc.

“NFC is coming on a broad basis in 2011,” Kahn, who is president and founder of the contactless-payment software and appliance maker, tells PaymentsSource.

The news that Nokia and Google are going to widely produce NFC-enabled phones means “phone manufacturers have finally realized that NFC is the element that will take smart phones to the next level of customer experience, adding a compelling new physical dimension that will sell more phones,” he says.

Kahn further predicts that the prospect of wide availability of NFC-enabled phones in the near future will compel banks and merchants [in 2011] to begin lining up their own NFC software and applications.

The partnership Vivotech announced Dec. 7 with Monitise PLC to bring mobile payment services to U.S. banks is part of the company’s multipronged plan to capitalize on what Kahn says will be “rapid acceleration of mobile-payment development on many fronts around the world in 2011” (see story). 

Vivotech also recently unveiled a similar partnership to bring mobile-payment services to European banks through a collaboration with application-management firm Bell ID, based in the Netherlands, and Germany-based PPC Card Systems, an EMV card-personalization maker (see story). And in late October, it announced that United Arab Emirates-based Teletech will use its technology to provide banks in the Middle East with mobile payment services.

More such partnerships to enable banks and merchants in the U.S., Europe and other regions to connect their services to mobile handsets are in the works, Kahn says, declining to specify potential participants.

“We are providing the technology that will allow various entities to become the trusted third-party managers to deliver mobile banking and marketing services to banks and merchants, opening this up to many players,” he says. 

Partnerships such as those Vivotech is building to enable over-the-air provisioning of phones with banks’ and merchants’ services will go a long way toward propelling “mass adoption of NFC based mobile contactless applications,” David Orme, CEO of Bell ID, said in a statement.

The arrival of a critical mass of NFC-enabled phones also is likely to encourage the formation of more collaborative partnerships between banks and wireless carriers, Kahn predicts.

“Recently we’ve seen indications that mobile-network operators are willing to break down barriers and collaborations, such as Orange’s partnership with Barclays in the UK and the Isis project in the U.S. linking Verizon, AT&T, T-Mobile and Discover,” he says (see story). “We’re going to see more of this kind of thing now that handsets with built-in NFC are on the immediate horizon.”

Vivotech also is seeing “strong interest” from merchants in the latest version of its contactless card reader, the VivoPay 8000 series, which has 32 times more memory than its previous readers, as widespread NFC deployment nears, Kahn says.

“Merchants that see the market potential that’s coming from the announcements about broad distribution of NFC phones are beginning to realize they need heavier card-reader memory to harness all these NFC possibilities for their loyalty programs, gift cards and proprietary credit services,” he says.

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