© 2012 IDA Singapore..All Rights Reserved.

Presented to <name/s> (Arial Bold 18pt)

By <name/s> (Arial Bold 18pt) 04 April 2011 (Arial Bold 14pt)

Mobile Payment and Value-Added

Services via NFC

- the Singapore Experience 3rd Annual Technology & Innovation Conference

Mr. Tan Eng Pheng

Senior Director, Industry Cluster Group

Infocomm Development Authority of Singapore

© 2012 IDA Singapore..All Rights Reserved.

Financial Services Are Changing

Global mobile payments to reach

US$1.3tn annually by 20171

1 Mobile Payments Strategies 2012-2017, Juniper Research, 15 Aug 2012

2 Mobile Phone Penetration, IDA POI, 15 Jun 2012

Use of contactless technology

in payment cards.

> High mobile phone penetration in Singapore (149.6%2)

will catalyze mobile financial services.

> With customer behaviour changing, banks and payment

service providers must modernise to keep pace, or risk

being left behind by competitors.

2

© 2012 IDA Singapore..All Rights Reserved.

Technology Disrupts Financial Services

1 Mobile Outlook Commerce 2012, Mobile Commerce Daily, Mar 2012

2 Research Links Contactless Technologies with Top-of-Wallet Behaviour, MasterCard, 3 May 2012

Contactless payments show

almost 30% lift in total spend

within first year of adoption.2 38% of smartphone owners have

made purchases using their

phones.1

21% of mobile phone owners use

mobile banking services; and

another 11% of plan to within the

next year.1

12% of mobile phone owners have used mobile

payments to pay bills or transfer money directly

to another person’s account.1

3

Mobile payment usage need not

be a subset of mobile banking

© 2012 IDA Singapore..All Rights Reserved.

NFC technology integrates the physical and online worlds, for both

information access and transactions, seamlessly and securely.

1 AdMob Mobile Commerce Survey, Feb 2011

The Future of Customer Interactions

Physical World Online Information

of respondents used their

mobile device to look up

product information while

in-store before making

purchase.1

53% of respondents used their

mobile device to find a

product or business, then

purchased at that business

in-person.1

67%

4

Discover Find Pay Review

PRE-SALES ENGAGEMENT CUSTOMER EXPERIENCE RECURRING SALES

© 2012 IDA Singapore..All Rights Reserved.

Peer-to-peer mode

Read/write mode

Card emulation mode

NFC phones as contactless cards: usage include credit cards, stored value cards, loyalty cards,

coupons, tickets, building access cards

NFC phones reading from / writing to embedded

RFID tags: usage include smart posters, identity tags for products (e.g. For

inventory mgmt)

NFC phones communicating with other NFC-

enabled devices to transfer data: other NFC-enabled devices include phones, digital photo

frames, printers, laptops

> NFC is an open standard short range wireless technology:

Secure and simple 2-way interaction between devices at close proximity

3 modes of operation

What is Near Field Communication (NFC)?

5

© 2012 IDA Singapore..All Rights Reserved.

3. Secure chip to store

secure application

1. RFID antenna

2. NFC

controller

Components required

to enable NFC:

Bridging hardware solutions

enable NFC capabilities on

existing mobile phones

NFC MicroSD NFC plug-in for

iPhones

NFC Stickers

Stick-on antenna

with NFC SIM

Integrated onto

EXISTING phones

> Secure chips are required only for secure NFC mobile services, such as payment,

gift voucher, ticketing and physical access control.

> Non-secure NFC mobile services, such as reading of smart posters, only require

the RFID antenna and NFC controller.

Enabling NFC Functionalist on Mobile Phones

In-built into

NEW NFC phones

Major phone makers starting

to roll out NFC phones

6

© 2012 IDA Singapore..All Rights Reserved.

Global Players See Opportunities in NFC

> Worldwide participation by several

international banks:

Barclays Bank and Orange Mobile jointly launched NFC

mobile services in May 2011.

China UnionPay and China Mobile announced in Jun 2012

their plans for 100 NFC-enabled shopping areas.

> Participation by many global players,

including merchants and telcos:

Google Wallet first launched in May 2011, and has since

revamped to draw funds from linked credit and debit cards.

AT&T Mobility, T-Mobile USA and Verizon Wireless jointly

created mobile commerce joint venture, IsisTM and would

begin trials in Salt Lake City and Austin in 2012.

> More than 200 NFC

trials/deployments in more than

54 countries since 2008

France started its pre-commercial multi-

bank to multi-telco deployment in Nice

from May 2010, and has since extended

to a total 17 French cities in 2012.

Korea launched the world’s first

commercial NFC rollout in Oct 2010 with

Korea Telecom, and since have about 2.2

million subscribers using NFC SIMs.

Turkey’s largest operator, Turkcell

launched NFC commercially in Apr 2011,

and is operating its own trusted service

manager with self-branded NFC phones.

UK announced a multi-telco joint venture,

Project Oscar in Jun 2011, comprising

Vodafone, O2, T-Mobile and Orange to

create a mobile wallet platform open to

any bank and merchant.

7

© 2012 IDA Singapore..All Rights Reserved.

Interoperable NFC Infrastructure

Call-for-Collaboration

> Oct 2011: IDA awarded CFC to Gemalto-led consortium

Trusted Third Party:

Payment Service Providers:

Mobile operators:

> Scope: To rollout at least 10 NFC services

> Aug 2012: First suite of NFC services launched

Establishment of an interoperable, secure and

scalable NFC infrastructure

Open access TTP infrastructure ready to deliver

secured NFC services to entire mobile

subscriber base

Development of a vibrant and sustainable multi-

application NFC environment

Launched 2 payment services based on CEPAS

and MasterCard Pre-paid

Promote widespread adoption of NFC mobile

services by merchants and consumers

Tap-and-pay at 30,000 retail points and taxis

using existing contactless payment terminals

Objectives Achievements To-date

8

© 2012 IDA Singapore..All Rights Reserved.

Z

Trusted Third Party

Infrastructure

Mobile Network Operators

Designed for consumer convenience,

providing choice and control: Load multiple payment products from

different banks/ payment service providers into the same mobile wallet

Control over which payment product for each purchase

Wide acceptance at existing contactless POS terminals

To provide an enriched mobile lifestyle, combining: Speed and ease of use of contactless

cards Connectivity and processing

capabilities of a mobile phone

Services could include gift cards, membership and loyalty cards, discount vouchers, access key cards etc

Multiple payment products, e.g. credit cards, pre-paid cards and stored value cards

Payment Service Providers

Various payment products and services on a single secure SIM

Bank 1 Bank 2 PSP 1

Bank 1’s allocated secure memory

Bank 2’s allocated secure memory

PSP 1’s allocated secure memory

Mobile Wallet in NFC Phone

9

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1. NFC handsets, SIM cards and TTP

infrastructure have been certified by:

> International payment schemes e.g.

MasterCard and Visa

> Industry standards bodies e.g. Global

Platform, EMVCo

> As secured as physical cards

2. Tamper-proof secure NFC SIM chip:

> Dedicated secure memory space for

various service providers to ensure

info confidentiality

> Consumers can download, activate

(over-the-air) and use NFC services

in a protected environment

> Expandable to incorporate new NFC

applications for payments,

transportation, ticketing and loyalty

programs etc.

Secure NFC Infrastructure and Data Storage

10

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NFC Mobile Payment Services in Singapore

11

> All three Sg mobile operators

have launched mobile

payment products in Aug 12

> Consumers can now use

their NFC mobile phones to

pay at retailers, restaurants

and F&B outlets etc, as well

as download coupons and

tickets.

© 2012 IDA Singapore..All Rights Reserved.

Mobile Phones Certified for Payment Services

12

Currently, there are 5 mobile handsets certified for interoperable

mobile payments here:

> Samsung Galaxy S3 and Galaxy S Advance

> Sony Xperia S, Xperia P, Xperia Sola

1 NFC sales to jump to 100 million in 2012, Reuters, 26 Mar 2012

More handset models are being tested to meet market demand

> Global market for NFC phones to grow to 700 million phones in 2016

from 100 million phones in 20111

© 2012 IDA Singapore..All Rights Reserved.

> Ability to offer secured

services to all mobile

subscribers through a

single TTP connection

> Faster time-to-market,

shorter development and

deployment cycle with

standardised interfaces

and processes

> Standard mobile payment

services can be deployed

within 6 months upon

agreement

> Cost efficient – reduce

duplicated infrastructure

and capital investment.

> Open access business

model

“A fully interoperable NFC environment would generate a market size approximately 8X

that of a non-interoperable environment.” - Study conducted by Consult Hyperion, 2008

TTP Single Trusted Third party (TTP),

Open Access Infrastructure

PSP 1 PSP 2 Service

Provider 1

Service

Provider N PSP N …. ….

Payment Service Providers OtherService Providers

Mobile

Operators

/ Telcos

Businesses Retail, Entertainment, Hospitality ...

Cross-Industry, Interoperable NFC Infrastructure

through Trusted Third Party (TTP)

13

© 2012 IDA Singapore..All Rights Reserved.

> “Card Replacement” positioning will not

justify NFC investment

> Opportunity to integrate value-added

services with NFC mobile payment

services Power of the mobile channel in consumer lifestyle

Transform customer engagement and increase sales

conversion

Stronger value proposition to encourage consumer

adoption

> Leverage new partnership Reach and richness of new partners

Emerging competitors for payment services

The NFC Business Case

1 Mobile Payments Readiness Index, MasterCard, May 2012

2 Market Trends: Mobile Payment, Worldwide, 2012, Gartner, 30 May 2012

NFC services require an all-encompassing approach in which payment is

the enabler so as to deliver an appealing value proposition.2

14

© 2012 IDA Singapore..All Rights Reserved.

Deepening Customer Engagement through

Interactivity and Insights

Digital identity and

secure access

Peer-to-peer mode Social networking

Interactive

advertising

Smart posters

New Interaction

Channels

New Transaction

Modes

Greater Outreach,

Stronger Relationship

15

Targeted bank

products

Customer

analytics

© 2012 IDA Singapore..All Rights Reserved.

Access control,

ticketing, peer-

to-peer, etc

Loyalty, rewards

and coupons

Advertisements

Growth of Innovative NFC Services

in a Sustainable NFC Ecosystem

Payments

16

© 2012 IDA Singapore..All Rights Reserved.

> Support EZ-Link Pte Ltd in its NFC mobile payment trial in transit

in end 2012.

> Encourage banks and payment issuers to connect to the TTP

infrastructure for quick deployment of mobile contactless

payment products.

> Sign up value-added service providers to develop innovative NFC

services such as rewards, loyalty and ticketing.

Beyond the NFC Services Launch

17

© 2012 IDA Singapore..All Rights Reserved. 18

More information about “NFC Payment and

Mobile Services Initiative” can be found at:

www.ida.gov.sg/Finance

Speaker’s email contact:

Tan_Eng_Pheng@ida.gov.sg

Thank You