The development of contactless technology, thanks to the NFC adoption in mobile handsets, is offering a new opportunity to create and develop value added services for the end user with an innovative and interactive experience.
The adoption of common specifications within the GSM Association provides Mobile Network Operators (MNOs) a common and interoperable layer to build new services and NFC benefits in different application environments such as mobile ticketing, payment, loyalty, and advertisingtransforming the traditional physical wallet in a digital wallet with all of the required services.
The subscriber identity module (SIM) that results from this scenario is a secure domain where services accessed via the wallet are independently stored with a level of security that's similar to smart cards.
The user can interact with the different applications through the UI of the mobile phone with the guarantee of a trusted and personal repository (the SIM card) that is able to protect all the sensible data.
Recent mobile wallet trials have led to an ecosystem of different partners (MNOs, banks, financial institutions, service providers, transportation authorities, and others) that are creating new business models that support innovative payment and merchant services, and understand the customers needs.
Consumers are adopting these new technologies because of the ease of use, and the additional service opportunities compared to traditional channels. To execute daily payments, such as bus tickets, coffee, newspapers, magazinesand perform more complex functions, such as discount redemption and authenticationit requires the user to only tap a smartphone to an enabled reader.
As the mobile payment launches take place in different countries, wallets are going to host more services and new enhancements can leverage on the same secure SIM technology and increase the number of possible accessible services, such as mobile healthcare transactions and digital signatures.
The levels of security can be different based on the data sensibility and transaction value but the customer would perceive the same ease of use, such as inserting a PIN or a password directly through the screen of his smartphone. If third parties are already using smart card technologies or W-PKI infrastructures, the adoption of the solution on mobile phones would be seamless.
The customer will use a unique ID to access the different federated services, and will be able to authenticate himself authorizing and signing documents with the certificates stored in the SIM.
The great advantage of keeping these applications mobile is the opportunity to increase adoption of mobile payments, and allow a simpler customer approach, since the mobile phone is part of the common daily life and is reducing the complexity of traditional services.
MNOs need still to spend efforts to allow full interoperability and allow NFC service roaming, so customers will be able to use their applications in a seamless manner also when travelling abroad. That would also benefit the NFC-led migration from physical to digital wallets.
Sergio Cozzolino is the head of the consumer mobile service department for Telecom Italia in Rome.