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NFC Trusted Services Manager

Picture of Collet Kudze
NFC Trusted Services Manager
by Collet Kudze - Wednesday, 27 May 2009, 12:08 PM

A lot of discussion has already taken place on the role of a trusted third party in an NFC business model. The creation of such an entity means that a regulatory body should be assigned to manage the TSMs per country or zone. Typically, each country would have at least one TSM.

I argue that the MNO should take over the role of the TSM.
The MNO already has a CallCenter which can be used for the new service support.
With the Secure Element (SE) on the MNO SIMs, ( which looks like the most viable option to deploy NFC), the operator already carries out essential activities such as provisioning, SIM blocking, etc.

Mobile devices are naturally associated with the MNO as opposed to the financial institutions. The end user who is facing a problem trying to purchase using an NFC device will naturally call the MNO call center to yell the typical "I cant buy with the mobile phone"

Since the TSM, who is now the MNO needs to have access to the credit card details of the subscriber, strong partnership between the MNO and the financial institution (card issuer) is required. It therefore makes sense that the MNO and the bank operate as one entity. We can as well have the MNOs and banks merging to form a Mobile operator-cum bank. Each mobile operator-cum bank then becomes three entities in one (MNO + Bank + TSM)!

If we also look at it from another angle, we see that a subscriber who has lost the NFC device simply calls the MNO_BANK_TSM and the SIM (with all the credit cards) is disabled. This reduces any fear by the subscriber that "Maybe my cards are still active with the bank" ( well the bank is now a mobile operator!)

Any thoughts???

Picture of Jason Delport
Re: NFC Trusted Services Manager
by Jason Delport - Wednesday, 27 May 2009, 12:53 PM
It makes sense practically (I agree that NFC provisioning is currently a nightmare) but I think it's a very dangerous idea. I would rather store my money under my mattress than trust an MNO with it. :)
Picture of Dean Bubley
Re: NFC Trusted Services Manager
by Dean Bubley - Wednesday, 27 May 2009, 1:56 PM
This could only work if the TSM business of the MNO was totally disassociated from the access business.

There must be absolutely zero impediment to churn placed on a user's choice of TSM, especially for banking / credit card reasons. It must be possible to either port your NFC apps across to another operator (and in that case all the MNOs in the country must each take a TSM role), or alternatively the MNO would need to be able to act as TSM for customers on other networks - problematic if the trusted element is in the SIM.

Otherwise, there is negative value in choosing the MNO for that role in the first place.

Any MNO strategy that sees the TSM business as a means of customer lock-in is doomed to fail - people aren't stupid. (And even those who are stupid will only make that sort of mistake once - and then shout about it in outrage).

People know there's a good choice they'll want to churn at some point. Why would you voluntarily make it more difficult for yourself?

*Maybe* over time there will be NFC/TSM applications that create genuine *loyalty* - but it certainly isn't around credit cards in my view.

Picture of C. Enrique Ortiz
Re: MNO as NFC Trusted Services Manager vs. 3rd-party service-enabler
by C. Enrique Ortiz - Wednesday, 27 May 2009, 4:12 PM
In short, I disagree with Collet that the MNO should take over the role of the TSM...


MNOs are looking into services to lock-in subscribers... 3rd-party service-enablement, in this thread, enabling financial institutions to offer their services via the handset, is the right move for MNO. I don't think MNOs will get into financial services all by themselves; it won't work for them.I've seen it; it is a very complex and greedy ecosystem.

The premise that because MNO have call-centers that they are perfect to become the financial body for mobile is flawed. Have you ever been at a call-center before? I've, even recently -- it is total chaos as it is right now; they are trying to eliminate/reduce calls, not add more.

But the idea the MNO are (3rd-party) service enablers, including call-center routing to the service-provider, in this case, the financial institution, might is a good one.


NFC and Smartcards are designed to enable services ran by 3rd-parties, the way it should. But SIM-based apps are a niche, and will always be a niche as long as they remain so MNO-controlled -- that by default will limit progress. (But if you are well-connected to MNOs, go for it, you will be one of the few and it is a money making opportunity.)

The idea of SIM-based (i.e. operator controlled) NFC is problematic and in my opinion (I hope) this battle is not over yes, even tho I'm afraid it almost is. Some companies such as Nokia realize this problem w/ SIM-controlled NFC and are pushing for alternatives -- I hope at the end at least we have 2 approaches. And guess which one will yield the most applications and innovation? Yes, the open one.


MNOs are best at one thing: the voice/data-pipes! And they should stick with that. MNOs are best at service-enablement, such as enabling the technologies that allow for better services, some of those 3rd-party (apps/app stores, richer platforms, billing, better help/troubleshooting, new services) and should stick with that. And they will do a lot of money.

The ones that enable the better services will reduce churn.

As an example: how will at&t reduce churn when their iPhone exclusivity expires? 1) remaining competitive w.r.t. cost of ownership; their are rumors they are reducing the cost of data-plans, and 2) by enabling better (3rd-party) services that others MNOs don't have.


MNOs should become very good at (3rd-party) service enablement, and stop (over) controlling the SIM card -- at the end the applications and services that will come out will benefit everyone.

Let's open the (SIM-card) platform!

For some information on NFC see my NFC page at: http://weblog.cenriqueortiz.com/touch-nfc/

BTW, all I write is from a U.S.A. perspective!

Picture of Martin Powell
Re: NFC Trusted Services Manager
by Martin Powell - Wednesday, 27 May 2009, 2:01 PM
I don't agree becuase I don't see a compelling business benefit to MNO's or banks to merge to provide this service. Mobile Operators don't understand how to manage finanical risks unlike banks are supposed to (although they haven't been very good at it recently). Banks don't understand how to operate in a world where they don't have complete control over the distribution of credentials.

Banks and MNO's have been discussing this for years. They haven't been able to agree on a shared business model to support mobile credit/debit card payments. MNO's are used to operating in a 30% margin business, banks are used to high volume secure transaction processing and managing the retailer acquisition.

There would have to be a VERY significant benefit for MNO's and banks to come together in this way. Although NFC is popular with triallists I don't see the benefits to banks and MNO's will be big enough to make them want to merge. If the services do take off it's more likely we will see different models emerge depending on the scope and security requirements of different NFC-based services - an MNO may not want to use a TSM for some services (such as loyalty cards) but TSMs may be useful for others (like credit card payments where a truly miltinational service would be needed).

Picture of Giff Gfroerer
Re: NFC Trusted Services Manager
by Giff Gfroerer - Wednesday, 27 May 2009, 5:11 PM
Can't be the MNO. End user has to be able to move from carrier to carrier without thought about the "mobile wallet". If tied to the MNO, how is the transfer made easy?

Understand it could be like number portability, but i am not personally comfortable with my financial information going from MNO to MNO as I move services.

Needs to be an outside party unconnected to banks, MNOs and the like to ensure compliance.
Picture of Simon Cavill
Re: NFC Trusted Services Manager
by Simon Cavill - Friday, 29 May 2009, 7:15 PM
As someone who runs a mobile payment business....

As already highlighted in this thread, there is simply no business case that makes sense for the various parties involved and is a prime reason why NFC is still a long way away for the general public.

My personal opinion is that anyone doing this will have to be PCI/DSS compliant as a minimum and that directly excludes the vast majority of MNO's who are currently outsourcing their currently held client payment details to third parties as they are simply not capable of complying with the required security standards.

So, it has to be a trusted third party with close links to the retail banks and so my money would be on the national payment switches such as VocaLink, Equens and others. In Europe anyway they are currently rolling out the SEPA faster payments scheme and by linking phones directly to consumers accounts in a secure and scheme protected manner, it makes it possible to facilitate additional services that the card networks can't offer. These include person to person payments, bill payments and other aspects of mobile banking including using the mobile to validate ATM transactions or to authenticate web access to personal/business bank accounts.

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