As mobile payments gained momentum, financial institutions faced growing pressure to determine how they would participate in emerging NFC payment ecosystems. The launch of Isis and the partnership between Monitise and ViVOtech highlighted the importance of infrastructure components such as Trusted Service Managers (TSMs), which enable the secure over-the-air provisioning of payment credentials to mobile devices. The success of mobile payments would ultimately depend on how effectively banks, mobile operators, and technology providers could work together within an increasingly complex ecosystem.
Now that Isis, the mobile operator payments joint venture, is launched and intending to make NFC payments a reality, one of the major questions hanging in the air is “what are the banks going todo?” A couple of vendors have teamed up to help banks answer that question for themselves. And it is an interesting couple.
Monitise calls itself a “mobile money solutions” provider.Originally launched in the UK, Monitise has been offering mobilebanking and remittances for a number of years, has productionsystems in the UK and USA handling “100 million mobile inquiriesand transactions a year.”
ViVOtech’s stock-in-trade has always been contactless payments.Its line of contactless payment terminals are in a number ofmerchant’s hands. Its contactless sub-assemblies are built intopayment terminals from the top manufacturers.
But this announcement is about ViVOtech software. The companyhas always realized that mobile payments, in particular, requiresan ecosystem build to be successful because the card issuingprocess is so different. There’s no card. The payment accountcredentials are delivered over the air (OTA) to a secure hardwareelement in the phone, either built directly into the phone or on aSIM card or microSD card.
This OTA provisioning function as well as security management isprovided by an entity called the Trusted Services Manager (TSM).The TSM is responsible for getting card credentials to the handset,updating them as necessary and acting as a critical go-between forissuers and the mobile operators. That’s the role ViVOtech softwareis playing in this partnership.
The Isis JV will, no doubt, have its own TSM facility. It’sunlikely to provide access to a competing TSM like ViVOtech’soffering. I’ve written elsewhere on the potential balkanization of NFC. The TSM is yet another barrierto interoperability. The success of the Monitise / ViVOtech tie-upwill hinge on how urgently financial institutions respond toIsis.
The evolution of mobile payments depends on more than just consumer adoption of NFC technology. The ability to securely manage payment credentials and ensure interoperability across multiple stakeholders remains a critical challenge. As financial institutions evaluate their mobile payments strategies, solutions built around the Trusted Service Manager model may play an important role in enabling secure deployment and management. Ultimately, the pace of mobile payments adoption will be influenced by how quickly banks respond to new ecosystem developments and overcome barriers to interoperability.