Blog Post

Au revoir NFC? Carrier Bouygues reportedly cools on contactless payments

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

France’s Bouygues Telecom has effectively abandoned its program for using mobile phones as contactless payment devices, according to a report in NFC Times, a publication devoted to the relevant technology.

The report states that top executives associated with Bouygues’s near-field communications (NFC) efforts have left or are leaving the company. It says Bouygues, France’s third-largest mobile operator and a pioneer in the NFC field, will participate alongside banks and other telcos in a delayed national push for building out NFC infrastructure – making sure shops support the technology at the point of sale.

However, it says Bouygues will supply no promotion or customer support, and won’t provide “updates to the technology”. The reason for this is apparently financial – Bouygues is undergoing restructuring and is looking to cut costs – but it’s hard not to see this in a wider context.

NFC is still not a sure thing when it comes to handsets – indeed, outside of a couple of countries it’s barely taken off for users of contactless payment cards. Part of this is down to manufacturer enthusiasm; Apple(s aapl), for example, still doesn’t build NFC into its iOS devices.

And, particularly after the UK’s O2 carrier ditched its mobile wallet scheme last week, there’s a big question mark hovering over the whole concept of mobile payments, at least in developed countries. Mobile payments are absolutely huge in countries such as Kenya and Pakistan, but that’s because people there mostly lack bank accounts. The advantages for those who already have bank cards in their physical wallets are a lot less tangible.

Even if mobile wallets and payments do take off, the business case for carriers is far from clear – there are a lot of actors in this play, and everyone wants a slice. Perhaps that’s why Bouygues has gone cool on the idea. I’ve asked the carrier for comment, and will update as and when it comes in.

2 Responses to “Au revoir NFC? Carrier Bouygues reportedly cools on contactless payments”

  1. A number of MNO’s around the world have pulled back from their NFC position of 6 months ago. Is this because they predict the end of NFC? I don’t think so..

    I think it’s much more likely that the announcement of HCE support in Android 4.4 has given the banks an opportunity to implement mobile payments without needing MNO involvement. They can implement based on changes only needing to take place within the issuer environment. This has seen many banks take a sudden new interest in NFC and those already working with the technology to switch their attention to the opportunities afforded by cloud based mobile payments using NFC and HCE.

    The ‘old’ business case that was the rationale for the MNO’s was based on renting space on the SIM based Secure Element for the payment credentials. That case has been weakened but I don’t think it has destroyed all opportunities for the MNO to be involved. I think in future we’ll see hybrid solutions where an applet and tokens may be stored in the SE whilst the payment credentials remain in the cloud (issuer host). The market will find it’s rightful place based on transaction value, security requirements and the commercial conditions that the MNO wishes to offer. Some will be pure cloud, some will be hybrid. Some may still be full SE.

    For now, there has been a power shift, issuers are heading down the HCE route and that puts the previous business models of the MNO’s in jeopardy.

    Will this kill NFC? No it will enable it to come to market faster and create a level playing field for the commercial discussions between the banks and the MNO’s.