Carriers Should Leave The Mobile Payments Ecosystem

In the past few years carriers have been forcing OEMs to disable the security module on their NFC phones. Their aim is to convince banks, credit card companies, transport operators and others using secure smartcards to rely on the SIM security to authorize transactions, and control the deployment of NFC services.
That hasn’t work. After numerous trials and small launches, operators and banks have failed to convince customers to adopt the mobile payments system they championed. Why? mobile walletMostly because it is too complicated for end users to activate the mobile payments on their devices: usually it involves obtaining a new SIM card, sometimes changing carriers and then only works with banks that have an agreement with the operator, and after all that only in one country. Also the costs associated with SIM based SE have been a source of friction between carriers and credit-card issuers. The card issuers that wanted to provision payment apps have been faced with various charges, including renting space on the SIM, setup charges for TSM services and fees for every transaction during the lifetime of the product.

That is why some banks have abandoned SIM security based payment systems to embrace open alternatives such as Host Card Emulation (HCE). HCE promises the possibility of emulating any smartcard, including payment cards, in the device and the cloud. No longer is it necessary to use a Trusted Services Manager (TSM) to do the provisioning of the payment card. Instead the EMV payment transaction is performed from an application residing in the mobile phone’s operating system. To the POS, this mobile app now looks like the payment card. This pushes mobile operators out of the picture, and allows customers store any card in their phones, in theory.
But security concerns about the Android OS and the cloud-based HCE (although it has the blessing of the three major credit-card companies) are making the adoption of HCE extremely slow. On top of that, since the Android OS is responsible for emulating the card, the mobile device needs to be powered up otherwise it’s useless. Lastly, in order to avoid fees from external vendors, the card issuers need to run their own cloud servers to manage the hosted cards and authorize transactions. The upfront investment is substantial, and few banks have the in-house skills to deliver HCE-based services.
I recently wrote about the new Apple Pay service on the iPhone 6 and Apple Watch being a disruptive force in this fragmented mobile-payments ecosystem.
What Apple did — apparently with a lot of help from NXP which fiercely refuses to comment– is bring the best of both worlds together: a mobile device with a hardware secure element (not the SIM card) that can be easily provisioned over the air by the issuing bank or credit-card company. Users only need to snap a picture of any payment card supported and, after a security check, the SE is provisioned over the internet with the right credentials.
For banks, credit card companies other payment solutions the only thing they need is to get their payment process integrated by Apple. In the case of EMV cards (the chip+pin ones used in most of the world) the integration could be almost automatic; it all depends on the negotiation between Apple and the issuing entities.
Apple has several advantages to implement the contactless payment system:
  1. They don’t have to manage several models of the iPhone, something Android manufacturers need to.
  2. They have simplified the user experience. No need to use any “wallet” and they can use their existing iTunes and Passbook accounts to store the cards.
  3. They included tight security (Secure Element, Tokenization and Biometrics), something that issuing banks, payment processors and the big three card companies like. That means low fees for the “card present” transaction.
  4. They have the power to impose their model to MNOs, something more difficult for Android OEMs, with the exception of Samsung and maybe another two.

Now, what is next for Android? Handset manufacturers can’t let Apple have this huge advantage, and their previous experiences with the operators have been frustrating, to say the least. OEMs such as Samsung, Sony and HTC are focusing on providing real solutions to their users, and need to get a mobile payments solution for them similar to Apple Pay.
Apple has apparently solved much of the problems related to provide a working solution for contactless mobile payments. Android OEMs such as Samsung are left with the dilemma of being left behind. One market that Apple is not addressing right now is public transport, where contactless solutions are used by over a billion people every day. Another one is access control, where NFC and RFID have been in use for many years.
If the mobile manufacturers in the Android ecosystem can come with a working solution addressing the transit and security markets it could give them a significant advantage while they also solve the mobile payment issues.
But they need a similar approach with a solution that is easy to implement, not tied to individual carriers, universal and user friendly.
Article first published as "A New Approach To The NFC Payment Conundrum" on SAP Business Innovation

Sub 1GHz Wireless Standards For IoT

New standards such as 802.11ah and ZigBee will pave the way for urban smart grids and for license-exempt data transmission in the near future. Also, the EU announced that the 700 MHz band (currently used for UHF TV) in Europe should be dedicated to wireless broadband by 2020.

Public WiFi AP in Barcelona

Read the rest of the article on UBM Future Cities

New Electric Buses in Barcelona Service Regular Lines

The city, under the ZeEUS project, has incorporated a the Basque-built Irizar i2e electric bus in its services. This model has a similar range to the K9 -- from 200 to 250 kilometers (125 to 155 miles) after an overnight charge, a capacity of 78 passengers, and a 230 kw engine powered by sodium nickel batteries. The bus is also equipped with advance braking charging.


The new Irizar bus joins the Chinese-made  BYD K9, which Barcelona's TMB has been testing since last year..... Read the rest on UBM Future Cities