With the launch of NFC services expected from August, consumers will be able to use NFC-enabled mobile phones to tap and pay at over 30,000 retail points including taxis equipped with contactless POS terminals.

The foundations have been laid for the growth of a robust and vibrant Near Field Communications (NFC) ecosystem in Singapore. Barely 10 months after the award of an NFC Call-for-Collaboration by the Infocomm Development Authority of Singapore (IDA), a cross-industry, open-access infrastructure has been implemented, enabling businesses to offer secured NFC services to all mobile subscribers in Singapore in a timely manner, without the need to invest in their own infrastructure.

“The open access model for NFC infrastructure allows businesses to deploy innovative payment and other secured services, providing convenience to both consumers and merchants, and enabling commerce for all,” said Mr Ronnie Tay, Chief Executive Officer of IDA.

NFC is a technology that allows a mobile phone to be used for making payments as well as engage other useful services such as ticketing, coupon redemption, advertising and customer loyalty programmes. For consumers, this open access approach adopted by IDA empowers them with the choice of having multiple contactless payment products on their NFC phones, giving users control over which payment product they would prefer to use for a specific purchase.

On 3 August, the winning consortium led by Gemalto announced its readiness to roll out credit, pre-paid and stored-value payment services through NFC-enabled mobile phones. Other members of the consortium include Citibank, DBS, EZ-Link, and all three mobile operators in Singapore - M1, SingTel and StarHub.

“The mobile wallet has finally arrived in Singapore,” said Mr Tan Teck Lee, Chief Innovation and Technology Officer and Asia President at Gemalto.

He credited IDA and the industry for their forward-looking approach to the NFC initiative, which made it possible for the consortium to achieve the world’s first nationwide NFC deployment at its current speed and scale. Key elements of this approach included an adoption of global standards, technology and payment protocols, as well as the use of a Trusted Third Party (TTP) infrastructure to simplify the complex systems that would otherwise have to be developed by each mobile network operator and payment service provider individually.

Hosted in Gemalto’s Trusted Services Management data centre in Singapore, the TTP infrastructure provides a bridge for banks, mobile operators, businesses and consumers. By having just one tier linking the various parties in the NFC ecosystem, each new service provider who comes on board will only need to establish a link to the hub operated by Gemalto.

“We see this as the way to help us roll out services quickly to all the mobile subscribers,” said Mr Tan Eng Pheng, Senior Director, Industry Cluster Group, IDA. “With the foundational work done by the consortium, new payment service providers will be able to roll out their services within six months, achieving faster time to market and obviating the need for every single service provider to invest in dedicated infrastructure. This open ecosystem also allows the NFC to achieve a network effect and present a better business case for the service providers.”

A key factor addressed by the consortium was security. The NFC infrastructure, SIM cards and handsets have gone through certification by international payment schemes such as MasterCard and Visa, as well as by industry standards bodies such as GlobalPlatform and EMVCo where applicable. For example, different banks’ payment products are stored in separate compartments on tamper-proof NFC SIM chips to ensure security.

To provide a consistent user experience, the consortium also looked into the harmonisation of customer care support processes across participating banks and telcos, ensuring that all important issues are addressed with each query. These cover scenarios such as payment product application, activation and termination, loss of mobile phones, or change in phone numbers or service providers.

With the launch of NFC services expected from August, consumers will be able to use NFC-enabled mobile phones to tap and pay at over 30,000 retail points such as convenience stores, fast food outlets, retailers and taxis already equipped with contactless POS terminals. A number of NFC handset models from Samsung and Sony have been certified for use with the suite of services to be launched. More NFC handsets will be offered by the mobile operators in the coming months.

While the initial NFC deployment is focused on retail payment, IDA and the consortium members are also working with the Land Transport Authority to assess NFC mobile payment readiness for transit in early 2013. As part of the preparation, a public trial will be conducted by EZ-Link in end 2012, in partnership with public transport operators.