Telefonica Digital rolls out its NFC wallet for BlackBerry

Telefonica Digital and RIM have announced details of a service for NFC payments with BlackBerry smartphones. The solution will be deployed first in Spain as part of a pilot programme that will roll out in several international markets in 2012. It will run on three of RIM’s devices, all of which are NFC-enabled – the BalckBerry Bold 9900, Curve 9360 and Curve 9380.

 

However, only 350 carefully chosen employees of Telefonica Spain will get to sample the pilot service. Still, Telefonica COO Julio Linares is happy with the plan:

 

“We have chosen the BlackBerry solution for this pilot because of the security that the platform brings. RIM’s participation has been key for this pilot project, and we are now planning to extend the project to more and more Telefonica employees around the world.”

 

When non-employees will get their hands on the Wallet service is not clear. Matthew Key, Head of Telefonica Digital, alludes to an eventual public launch next year, stressing though that the industry is still very much in a trial stage:

 

“We are getting ever closer to the point where our customers will be able to take the contents of their wallets and put them on their mobiles. Trials such as this are important to ensuring a great customer experience and we look forward to seeing the launch of commercial wallet services in several markets next year.”

 

The Telefonica Wallet trial uses SIM-based NFC capabilities, which the telco says offers a simple interface for managing payment cards. The application replicates a physical wallet, showing the different cards available to the user. Once the user has selected a card, they are offered a range of options including making transactions, getting account balances, or receiving confirmations from the bank. Additional partners participating in the pilot scheme in Spain include banks and financial institutions, retail and food stores, and gas stations.

 

The Telefonica trials actually began back in April, using NFC-enabled handsets from Samsung.

The vendor’s Nexus S device, made for Google’s “proving technology” strategy, is also being used for Google’s own Wallet service in the US.

 

Taking time off from dealing with the media and financial bashing his company is currently receiving to lend his support to the trial, Jim Balsillie, co-CEO at RIM, added that they are committed to supporting the development of NFC:

 

“We have a strong partnership with Telefonica Group and we are very proud to participate in this important pilot.”

 

Thanks Jim, now get back to the fight to save RIM. Meanwhile, Telefonica will do its bit to get us all keen on the benefits of NFC. However, with NFC chips fitted in only a tiny proportion of handsets (best estimates put it at just under 10 per cent of models available), the prospects of a fully-fledged commercial service remain firmly in the distant future. Will next year be the moment when NFC breaks through? Well, the industry has been saying that for years now, to no avail.

 

However, there’s speculation (and it’s only speculation at this stage) that Apple will include NFC hardware in the next iPhone release and that Microsoft will include NFC support in next year’s upgrade to the Windows Phone 7 operating system. Apple’s apparent interest is well known – in fact it was a surprise that NFC wasn’t part of this year’s iPhone (but the we all thought it would be the iPhone 5 and not the speed-bumped 4S) – but Microsoft’s is less so. However, it would make sense for Microsoft to support NFC, given that its main device partner Nokia was an early supporter of the technology.

 

ABI Research senior analyst Mark Beccue warns in a new report published this week that whilst mobile operators will provide the majority of NFC-based mobile wallets, their market share will erode between 2012 and 2016 (from 75 per cent to 63 per cent) as Google and Apple claim loyal users:

 

“By the end of 2012, Google will prove that Google Wallet is a hit with consumers. By 2014, we will see Google Wallets supported alongside competing MNO offerings globally.”

 

He adds that NFC-based mobile wallet users will grow to around 600 million in 2016. This will be due to many more NFC-capable mobile phones being released in the market, together with the emergence of more compelling business cases. By as early as 2014, Beccue says mobile operators will incorporate phone-OS and over-the-top mobile wallets into their own wallet offerings, which will slow down the growth of truly independent third-party mobile wallets.

 

Meanwhile, a two-year-old company in Ireland has proved that the sector can attract the investors, having just raised €1 million to support its NFC development work. Zapa Technologies CEO Brendan McDonagh said:

 

“We are at the cusp of the emergence of a new global market which will see a step change in the customer experience of payment, loyalty and couponing and also see mobile operators become major players in the payments industry, as they create an alternative to card based payment.”

 

Add to this the news that Samsung and Visa are collaborating to deliver NFC mobile payments in London during the 2012 summer Olympics, and the prospects of a viable NFC market might just be getting better.