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Whoops: Telecom boss can't use his own company's mobile wallet

Pity Telecom director and chief product officer Rod Snodgrass.

His iPhone is incomptible with a new mobile payment system demonstrated today by Telecom, Thales and Auckland Transport.

Rod is in good company.

Most phones today don't come with the NFC (near field communication) technology required for the new tap-and-go payment system demo'd this afternoon (whose broad framework is also supported by Vodafone and 2degrees).

And there's no guarantee that Apple will support NFC in future - or other companies with their mass-market models.

They might, they might not. I have no idea (beyond the fact that Apple seems to have given up on the technology ever gaining traction. Instead it has opted for its Passport service, which uses e-vouchers and onscreen barcodes, plus optional GPS proximity triggers). Why bet on which way the fickle, fast-changing mobile market is going to head? 

NFC has been just six months away for about five years now.

Advocates of the technology – including Vodafone, at one briefing – pinned their hopes on Apple adding NFC with iPhone 5, finally popularising the technology.

It didn’t. Apple left NFC off the iPhone 5. Punters haven’t worried, buying the new model by the bucketload.

Telecom mobile product portfolio GM Ed Hyde was okay. He has brought a Samsung Galaxy S3 to the demo (you not only need NFC, but the right spec. Some rival Androids, like the HTC One X, have the wrong standard – at least for this rollout).

But as noted above, his boss was out of luck.

Hyde said he saw most phone makers releasing an NFC model over the next 12 months (and time, if nothing else, is on his side – the mobile payment solution today, about to be piloted by around 30 people, won't go live until "late 2013" - developer-speak for "sometime in 2014". The 30 people on the trial, more or less by necessity, are using the Galaxy S3).

He hopes NFC fill not only spread trough high-end smartphones, but filter down to $150 to $250 models (and 2degrees has already managed to source LG and Huawei models near that price).

I’m not so sure.

Apple is pushing off in a different direction with its software and onscreen barcode-based Passport service, which uses GPS/cellular and wi-fi to to establish your proximity. (In the Android camp, Google Wallet does use NFC, but has yet move beyond a gimmicky niche.)

Some media see GPS-based solutions, lead by Square (a mobile payment sevice from the founder of Twitter) as a potent threat to NFC.

And it’s very a chicken and egg situation. Telecom (and Vodafone and 2degrees) are hoping more NFC-equipped models will appear on the market. Phone makers want to see mobile payment services to  – and major retailers onboard – before they hit the button.

NFC sleeve?
Hyde said an NFC sleeve could be an option in future for those who don’t have NFC phones.

But that’s another layer of complication (and, boy, Auckland e-ticketing does not need that) and expense. And good luck selling it to Aucklanders already cheesed off with the multi-year electronic payments fiasco, and solutions that come and go.

The good news
On a brighter note, Telecom, Vodafone and 2degrees are playing nice behind-the-scenes, cooperating, with Paymark, on the trusted services manager technology required to make a mobile payment solution work.

And, even better, the three are cooperating on an open wallet – open as in they will share the same basic software but will each be able to tweak it a little.

Westpac and mobile security specialist Gemalto provided other pieces of the jigsaw for today's demo.

All this cooperation makes it more likely that the mobile payment dream will come true. Not just your credit and eftpos cards, all your loyalty cards could be loaded, in virtual form, onto your mobile, for wireless payments at any retailer.

If only it wasn’t betting on NFC …

The demo itself
The demo worked perfectly. (It was held at the Auckland office of Thales, the French conglomerate that has emerged as the arch-enemy of NZ's Snapper).

No surprises there. NFC technology has been hanging around in the background for years, while manufactures, politicians, telcos, banks, payment network operators, retailers and others arm wrestle around it.

A Samsung Galaxy S3 was tapped against a payment terminal, the fare deducted, and our demonstator was duly allowed to walk through an actual ferry turnstyle.

As with 2degrees and Snapper's already up-and-running Touch2Go mobile payment scheme in Wellington, it doesn’t matter if you’re out of coverage, or the phone is off, as the NFC technology is in-SIM, as opposed to the rival in-Phone iteration used by HTC. It’s not as easy as just popping in an NFC-capable SIM card, as the an in-SIM handset also has to have an NFC antenna. Got it?).

Mobiles can be big time-savers for shoppers, and for travelers. 

New Telecom CEO Simon Moutter knows this. As Auckland Airport CEO he saw Air New Zealand introduce its acclaimed mPass app for iPhone.

If so, he could be naturally inclined to think Apple's alternative path to NFC, Passport (likely to be imitated by Android), could be a better path - or at least one that has to be taken into account as Telecom weighs its broader options for mobile payments and services.

There are so many potential avenues - including NZ retail software company Vend, which is working with PayPal on mobile in-store payments. And to keep its rivalry with Thales juicing along, last week Snapper staged an Auckland launch for its Touch2Go system, which it says can be used at 300 retailers if you buy a special NFC SIM card from 2degrees (for $20) or have one of five compatible Android handsets (the high-profile Samsung Galaxy SIII plus the Huawei Ascend Y201, and the L5, L7 and Net in LG's Optimus series).

Who knows where we'll end up with mobile payments ... or how much ratepayer money Auckland Transport (a division of Auckland Council) in its efforts to pick the right course. But where ever we get to, I'm pretty sure it will include iPhones like Rod's - and the phones of the great unwashed.


Telecommunications engineer Steve Biddle thows another complication into the mix: an API (application programming interface) in a phone's operating system software (such as iOS or Andorid) to communicate with a smartphone's NFC secure element. "There isn't such a thing as a 'standard' API, but several competing ones.The Open SIM Alliance API stands the best chance of becoming the 'standard' but whether Google will adopt it into the Android OS is another issue entirely."

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Comments and questions

Iphone fail once again.

There are no standards on NFC (and no current use for it). So makes sense not to include it.

The HTC X, for example, won't work on the trial as its NFC is a different standard.

Once the standards issue is sorted it makes sense to include it. But before simply makes it a gimmick.

I'm more worried about being 'tapped' and its all gone. Pickpockets are as old as man without it seems making it easier for the crooks.

Security is a major element of this and other mobile payment pilots.

But whatever's done, and however actually secure it's made, I suspect there will always be a popular fear of all-in-one identity theft.

And safeguards like a wake-up PIN on your phone and another pin to open a mobile wallet app can make it seem less attractive than swiping your old, standalone bus card or Visa/Mastercard.

Go live late 2013???

As soon as the physical card is working then the mobile solution should as well...something odd going on here.

Not odd. Just another smoke n mirrors closed user group pilot that is full of holes and won't go anywhere.

thales and telecom. Now I see how Snapper got shafted. Bet Telecom make a complete pigs ear of it (HINT: not supporting half the android phones out there is a pretty good start Telecom you losers)

couple of points. NFC is on most new Samsung phones and these have a strong market dominance. Face recognition is faster than entering 2 pins. The technology will become common. NFC is quite cool, plenty of uses for it. Tags are only about a dollar. at least these companies are trying to get with the times, give them a chance

Samsung's doing well with NFC in its top end models. And forgetting mobile payments, two Galaxy S3 owners can use the technology to bump phones and wirelessly swap files.

But we're talking the whole market here, where no single player is dominant.

NFC tags are cheap. But the cheap tags you see on the net are designed to be stuck on a poster or supermarket shelf.

For a phone-based solution, there are the security complications that Gemalto, Thales et al have been putting so much work into.

Sleeves or tags could work for a straight ferry/bus/rail solution, if the extra costs and complications can be worked through.

But Telecom, Vodafone and 2degrees are eyeing mobile payments for a broader retail experience. And If NFC doesn't go mainstream - and that's no given after Apple shunning it, and other cellphone makers failing to support it in most mid and low-price models over the past couple of years - then they'll be looking for a plan B.

Face recognition instead of entering a PIN would be brilliant, but it's not supported by mainstream Android phones at this point ... and remember Auckland Transport has spent forever just trying to get a simple tag-on/tag-off the bus system unified, so let's not expect Star Trek frills at this point.

Cant you trick facial recognition with a photo? Not exactly safe for a PIN replacement.

Or has it improved since the early versions.

The new Android OS "Jelly bean" has solved this with the inclusion of a blink component. It has also improved the recognition software so that it is more accurate when recognising an 'actual' face.

If apple jumped off a cliff would you? Actually if the apple fan boys did jump it would be living proof of darwinism as well as doing the world a huge favour

What are these guys playing at?

Auckland Transport has a monumental and expensive failure on their hands ie. the integrated ticketing project, and instead of getting that sorted they are messing around with silly pilots that will amount to nothing.

And who is paying for these sideshows that are as cringe-worthy as politicians kissing babies and cutting ribbons?

For the love of god, stop the madness!

Conversation with a dairy owner earlier today:

Me: do you do Hop card top ups?
Him: nope.
Me: darn. why not?
Him: not worth it. Pain in the a*se
Me: P

Can't wait for new cards with online top up. But what I really (really) want like a spice girl is an app so I can top up easily on the run.

Still, I agree that it does seem like a missed opportunity for Apple's latest to roll without NFC.

Did you know that you could top up a Hop card online from the day they were launched nearly a year and a half ago? You use a Snapper Feeder.

And since May this year you have been able to top up a Hop card "on the run" with a Touch2Pay phone from 2degrees.

It is disappointing that Auckland Transport has deliberately withheld this information from the Auckland public.