JBS Group, Business Advisory Services

Friday, November 12, 2010

RF-SIM, China Mobile, NFC and Reality

"A recent mobile-payment document from China’s largest mobile operator, China Mobile, makes no mention of the proprietary RF-SIM technology the giant telco had been promoting for mobile payment earlier this year." From the NFC Times.

RF-SIM is a technology that attempts to incorporate a radio frequency chip and antenna in a SIM card. Earlier this year it was all the buzz in China. The claim was that everyone in China would be able to wave their phone to pay, travel and authenticate. It now seems that this technology was not as robust as first hoped and hyped. Now China Mobile has mentioned that they might use NFC stickers initially to test NFC/Contactless payment and ticketing acceptance. 

In the US there are a number of potential upcoming trials of NFC enabled microSD cards sponsored by Visa, First Data, Wells Fargo and others. I have tested these microSD cards in a number of phones and have not found them to work consistently. They seem to work best if the card is exposed to the air so that it can touch the NFC reader without any plastic, metal or battery in the way. 

There are also a number of other problematic issues with these cards. Will bank customers replace the microSD cards already in their phones with an NFC enabled card? How many bank customers want to be able to tap their phones to pay? Who will pay for the microSD card? How many phones will these microSD cards really work in?

It is also important to realize that these expensive little NFC microSD cards contain only NFC tags. They are not capable of peer to peer or read-write communication. They are really no different than the contactless chip in a PVC credit card. At the present time they are not able to communicate with the phone's processor so payment type apps do not work with the little cards.

When considering implementation of a NFC/Contactless/RFID transaction system it is very important to look deeply into the technology and business models as well as to consider the realities around customer usage and acceptance. 

As exciting as these new wireless transaction technologies are, and they are very exciting, it is essential to be realistic as well. As tempting as it is to hype technological successes it is also very important to be honest and not to over promise. There are many technologies that could have been successful if they had not been over hyped that now lie upon the technology trash heap of history.

The reality is that RF-SIM does not work consistently as hyped. microSD cards do not work as hyped. Single wire NFC SIM cards do not work consistently yet. Large 'stickers' with NFC, Bluetooth and photovoltaic cells do not work yet and most people will never stick them to their nice phones. A few people may stick a NFC sticker to their phone if there is a really compelling reason to do so, but most people will not. Not everyone wants their wallet in their phone no matter what the mobile operators and handset manufacturers want you to believe. These are just some of the present realities.

NFC transaction technology has great potential but let's be realistic when it comes to PR and promotion. Let's learn from the China Mobile example and do it the right way.

© 2010 Jon Shore   All Rights Reserved

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