Towards a Typology of Business Models for NFC-Based Mobile Payment Services

Towards a Typology of Business Models for NFC-Based Mobile Payment Services

Faouzi Kamoun (Zayed University, UAE)
DOI: 10.4018/978-1-4666-9787-4.ch007

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Nfc: An Enabling Technology For Innovative Mobile Services

NFC is a short-range, standard-based wireless connectivity technology, designed to operate over very short distances, typically less than 4 cm for most practical applications, with a maximum theoretical range of 20 cm. NFC operates at the unlicensed RF ISM band of 13.56 MHz, and currently supports data rates of 106, 212, 424 and 848 kbits/second, with higher rates expected in future. The technology is compatible with existing contactless infrastructure and can be thought of as the fusion of RFID-enabled contactless smartcard and a mobile phone (Ondrus & Pigneur, 2007). This allows the mobile phone to act as a smart card reader. To establish a communication between two devices, using NFC, one device (the initiator) must be equipped with an NFC reader/writer, and the other device (the target) must have an NFC tag.

Key Terms in this Chapter

MNO (Mobile Network Operator): A company that provides mobile telephone services for subscribers and that has its own licensed frequency allocation of radio spectrum, as well as the required infrastructure to run an independent mobile network. The MNO is sometimes referred to as carrier service provider, mobile phone operator or cell phone company.

RFID (Radio Frequency Identification): An automatic identification (Auto-ID) technology; sometimes referred to as next-generation barcode. RFID enables an electronic device (a reader or transceiver) to use radio waves to identify and track tagged items.

UICC (Universal Integrated Circuit Card): A removable smart card used in a mobile device in GSM, CDMA or UMTS networks, depending on the application running on the card. In a GSM network, the UICC contains the Subscriber Identity Module (SIM) application. In a CDMA network, the UICC contains the CDMA Subscriber Identity Module (CSIM) application, while in a UMTS network it is the Universal Subscriber Identity Module (USIM) application. The UICC can store the subscriber’s account and contact information and enables secure and reliable data connection, global roaming and remote download of applications and services.

SWP (Single Wire Protocol): A standardized low-level (physical/data link) protocol that provides a single wire connection between the NFC chip and the UICC in a mobile handset.

WUSB (Wireless Universal Serial Bus): The wireless version of the Universal Serial Bus (USB). WUSB uses ultra-wideband technology to allow for short-range, high-bandwidth wireless connections over distances up to 3 meters at 480 Mbps or up to 10 meters at 110 Mbps.

Wi-Fi (Wireless Fidelity): A popular wireless technology that provides high speed local area network connection. Wi-Fi is a registered trademark of the Wi-Fi Alliance and is based on the Institute of Electrical and Electronics Engineers (IEEE) 802.11 family of standards.

OTA (Over the Air): A standard used for transmitting and receiving software and firmware in a wireless cellular network without the need for a USB cable or a local Bluetooth connection. The term is commonly used in reference to provisioning handsets with necessary settings or updating handset firmware.

SE (Secure Element): The component in the mobile phone where payment applications and customers’ credentials are stored.

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