None of these or other compatible models is currently sold in India. There may be a less expensive option: a patch that can be attached to the subscriber identity module (SIM)—the chip that connects a handset user to a mobile network with a unique number. Smart card firm Watchdata Technologies (India) Pvt. Ltd’s SIMpass is one such, capable of transforming an ordinary handset into an NFC-friendly device.
Vijay Parthasarathy, director at Watchdata, says SIMpass is compatible with 80% of the handset models currently in the market, and that the firm plans to commercialize it in India next year. “We are currently working on business models in India,” he said, without revealing more.
As for the readers, point-of-sale terminals that are used for making debit and credit card payments can be made compatible by plugging in an NFC adaptor.
The big question in India is who will pay for building the infrastructure, says Nehal Maniyar, vice-president, core products and delivery, C-SAM India.
Sorting this out will be a key hurdle off the list. In many of the other nations where NFC experiments are at more advanced stages, the infrastructure costs of setting up the readers is typically borne by transport authorities, retail establishments and banks, while the phones are subsidized by mobile phone operators and handset makers.
For instance, in C-SAM’s trial with Discover Financial, Motorola Inc. provided the NFC-compatible phones while Discover funded the NFC readers. It’s easier in countries that already use contactless readers extensively.
In Malaysia for instance, Maybank Group, the country’s largest bank, tied up with telecom operator Maxis Mobile Services Sdn Bhd to enable NFC payments across 1,800 retail merchants as well as in transport, highway tolls and even parking areas.
Contactless readers such as Visa payWave equipped for debit and credit card transactions are widely deployed in Malaysia’s retail outlets, public transport and highway tolls, making adoption of NFC technology easier. Maxis bundled the service with compliant Nokia 6212 handsets.
In India, the lack of such infrastructure in terms of devices and readers may pose initial hurdles, but once crossed, the adoption of the technology could be quick.
To draw a parallel, credit card growth in India after Citibank’s local arm introduced the concept in 1990 has to be described as gradual, both because of a lack of infrastructure and as potential users feared misuse and a likely reliance on credit.
But over the past few years, the local credit card market has galloped at 30% with the total number of cards in use touching 25.51 million, according to recent Reserve Bank of India data. Even today, the percentage of active cards in banks’ portfolios in India is 56%, much lower than the 80% in Australia and 75% in Singapore, says a study by Edgar, Dunn and Co., a financial services and payments consultancy.
Technology research firm Gartner Inc. predicts the number of mobile payment users worldwide will increase 70% over the previous year to 73.9 million in 2009. By 2012, at least 190 million people, or 3% of mobile phone customers globally, will use their handsets for payments, it said.