There was some interesting news last week in the mobile payments space that shows that progress is being made in developing what could be a key business function – that of the Trusted Service Manager.
The European Payments Council (EPC), the decision-making and coordination body of the European banking industry in relation to payments, and the GSMA have published a joint paper titled ‘Mobile Contactless Payments Service Management Roles – Requirements and Specifications’.
It sounds dry as dust but the implications could be interesting. The trusted service manager is the glue between the banks and the mobile operators, and as such can also work to open up contactless phones to other applications and uses. Mobile payments are something that operators could exploit, and seem a natural add-on to the hundreds of existing services already out there. But development has largely been held back by a lack of understanding between banks and operators.
The paper’s authors hope that it now offers a means to close an existing gap in the new Near Field Communication (NFC) ecosystem and also defines a minimum set of requirements for a TSM to interface with banks and mobile operators. TSMs facilitate the distribution, configuration and activation of the bank’s payment application on the Universal Integrated Circuit Card (UICC, also known as a SIM card) within bank customers’ NFC handsets.
“This is an important step forward as it is the first time that mobile operators and banks have worked together on a common vision which will ease the way for contactless payments,” said Alex Sinclair, Chief Technical Officer and Chief Strategy Officer, GSMA.
What is interesting about this is that it doesn’t have to be a card provider that becomes the TSM. In our next Mobile Europe Insight Report, published on Monday of next week, our report writers looked at the issue of the TSM. Here’s an excerpt of what they had to say:
As the role of the TSM has become better defined, a number of companies are now starting to provide these as a product offering. Whilst some are well established companies that have been involved within the Credit Card manufacturing industry or payment processing industries, Companies such as Gemalto, Venyon (part of G&D), Cassis and Vivotech all offer TSM services with differing company backgrounds. Venyon and Cassis both have strong backgrounds in Telcos, Gemalto with Financial Services and Vivotech with retail merchants and acquiring banks. None have a lead on any of the others with so few deployments so far, but each has its own view of how they should be deployed when compared to others.
This clearly shows that the role of the TSM covers two distinct areas – the Mobile Operator and the Card Issuer or Bank, and each clearly needs to maintain its own information relating to the user. Whilst this segmented model is one that is becoming the preferred model throughout Europe, with one or two exceptions, it is not without risk as both parties seek to control the key relationships with the end-user. Whether this model is correct or not and which model of TSM use becomes the norm is yet to be decided. However, what is clear is that the TSM should be neutral from the mobile operator and the card provider or bank.
The specifications published last week can help define those two roles and the required neutrality, and open the space for the benefit of all – banks and operators. It could be a small but key step in the development of mobile payments services in Europe.
If you would like to find out more about how the NFC payments market is evolving, then do look out for our Report next week.
Keith Dyer
Editor
Mobile Europe
http://www.mobileeurope.co.uk/news/news-anaylsis/8231-elisa-targets-lte-at-1800mhz-by-2012
http://www.mobileeurope.co.uk/news/press-wire/8229-itu-paves-way-for-next-generation-4g-mobile-technologies
http://www.mobileeurope.co.uk/news/press-wire/8230-european-payments-council-releases-trusted-service-management-specifications-for-mobile-contactless-payments
http://www.mobileeurope.co.uk/news/press-wire/8237-vocalink-says-research-shows-demand-for-new-mobile-payments-proposition
http://www.mobileeurope.co.uk/news/blog/8235-seenearly-creates-your-own-mobile-history
http://www.mobileeurope.co.uk/news/blog/8233-how-much-extra-coverage-does-digital-dividend-spectrum-give-you