VodafoneTechnology Forum2 November 2011Dusseldorf, Germany

Mobile Payment - Will NFC finally unlock a new value chain?

Martin GutberletTechnology Managermartin.gutberlet@icloud.com+49 (0) 172 2804475

Top 10 Mobile Trends and Technologies to Watch

HTML5

NFC & "touch to act" applications such as payment

Platform independent AD tools

Location & Context - indoor & outdoor

Bluetooth 4

802.11ac

M2M - cellular and WiFi

Augmented reality

Multiplatform MDM

LTE 8

More effective application delivery New business opportunities Innovative apps & experiences Management and control Better infrastructure

Top 10 Mobile Trends and Technologies to Watch

Publication Date: 12 August 2011/ID Number: G00215749 Page 6 of 96

© 2011 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

Figure 1. Hype Cycle for Consumer Technologies, 2011

Source: Gartner (August 2011)

Near Field Communication is Hype

NFC - The Technology

RFID Technology at13.56 MHzDistance: 0-20cm, up to 424 Kbit/s

Connecting Technology betweenSmartcards, RFID and mobile systems

Standards: ECMA-340 and ISO/IEC 18092 (FeliCa, Mifare)ISO 14443 (backward compatibilty smartcards)

Security concerns:Man in the middle attack - Use secure channelNFC Chipset and SIM Card - ETSI/SCPUser Data ownership - today‘s emotional TSM discussion

Mobile Payment & Mobile Wallet

Consumer electronics

Loyality & Coupons

Check in

Access Control

Healthcare

Transport

NFC Touch & Act Opportunities

The mobile payment idea

Defintion:

Mobile payment is a point-of-sale transaction conducted using a mobile device.

The future evolution of payment

0

100.000

200.000

300.000

400.000

2008 2010 2012 2014

Mobile Payment Users

0

5.000

10.000

15.000

20.000

2008 2010 2012 2014

Mobile Payment Transaction VolumeMobile NFC

Mobile Payment Users 2015:350 Mio, ww

Mobile Transactions 2015:426 Mio, ww

32 Mio NFC, ww

Mobile Payment shows a tremendous uptake

mWallet

Pros and Cons of 4 different approaches

Launched in USalready

Only Androidphones support

Limited carrier andclearing support, yet

Integrated withGoogle Offers

Vodafone‘smWallet approachnot launched, yet

Enhanced securitywith SIM

integration

Multi OScan be supported

Vodafoneonly

m-commercealliance

NFC notsupported yet

80% reach in Germany

Complexalliance structure

Carriercentric approach

Leading e-commerceprovider already

online Wallet

NFC Appon Android

phones

Commercialmodel to be defined

Carrier independent

approach

mPass - Business ConsiderationsDifficult alliance structure with competing interestsEarlier approaches such as Paybox failed

Business case will be based on transaction fees - still not defined

Gartner Forecast Mobile Payment 2015Total Mobile Payment Transaction Volume Germany 19 Bil. USDSMS 14 Bil. USDNFC 1.4 Bil USD

mpass Market share 10% (assumption) Transaction fee 1% (assumption)

SMS 1.4 Bil. USD SMS 14 Mio USDNFC 0.14 Bil. USD NFC 1.4 Mio USD

Devided between 3 parties (40:40:20)Vodafone SMS 4.7 MioVodafone NFC 0.5 Mio

Business case for a total turnover of 5 Mio USD???

Conclusion and outlook

• Mobile Wallets will replace card payments and will dominate micro billing long term

• Market confusion and security issues due to multiple offerings short term

• Carrier driven online payment systems may fail

• Mobile wallet uptake should be driven through coupons & loyality programs

• Enterprise NFC applications will require IT customization capabilities and may drive high margin business

Questions?