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According to Microsoft, its new Windows 8 Phone will feature an electronic wallet with NFC functionality, but one that is similar to Google Wallet and Apple's Passbook, and will still be compatible to U.S. wireless carriers as well. Demonstrating the Near Field Communications (NFC) capabilities of Microsoft's new phone operating system, Joe Belfiore couldn't demonstrate pay-by-tap, as he didn't have a suitable SIM handy, but that issue may be what pushes Windows Phone 8 to the front when it comes to paying for items with a mobile phone.
Belfiore did demonstrate NFC-enabled business cards, picking up a URL from an NFC chip embedded in a copy of Wired and setting up a peer-to-peer Wi-Fi link to play a Scrabble derivative, but despite flashing a wallet boasting credit and debit cards from Chase he could only use them online as his SIM didn't have the requisite secure element for paying with a tap of the mobile handset.
As well as a short-range radio connection, pay-by-tap needs a secure location in which to store the cryptographic keys and do the encryption used to authenticate payments, but where that secure location goes is still the subject of intense and increasingly political debate.
Wireless network operators say that the SIM is the perfect place-- it's already secure and if the customer changes handsets then their wallet comes with them, but that places the payment schemes firmly under the control of the network operator and if customers change networks then they'll have to manually move their wallets.
Belfiore did demonstrate NFC-enabled business cards, picking up a URL from an NFC chip embedded in a copy of Wired and setting up a peer-to-peer Wi-Fi link to play a Scrabble derivative, but despite flashing a wallet boasting credit and debit cards from Chase he could only use them online as his SIM didn't have the requisite secure element for paying with a tap of the mobile handset.
As well as a short-range radio connection, pay-by-tap needs a secure location in which to store the cryptographic keys and do the encryption used to authenticate payments, but where that secure location goes is still the subject of intense and increasingly political debate.
Wireless network operators say that the SIM is the perfect place-- it's already secure and if the customer changes handsets then their wallet comes with them, but that places the payment schemes firmly under the control of the network operator and if customers change networks then they'll have to manually move their wallets.
For it's part, Google's compromise is to simply have one secure element in the phone (under the control of Google) but still support a SIM-based secure element if that's what users want, but all the while reminding them it's not something they need.
The Android Wallet application will merge the two so that users shouldn't see the complexity, but when they change handsets or wireless carriers it might become more obvious to them.
By contrast, Microsoft is leaving the pay-by-tap business to the network operators, and has already signed an agreement with Orange for the first deployments in France although other mobile operators should be quick to jump as their collaborative efforts to create standard platforms come together over the next few weeks.
And of course, in the United States, that's under the ISIS brand. In the United Kingdom, it's known as Project Oscar and is being challenged by Google and PayPal who've complained that their inability to use the SIM is anti competitive. Both ISIS and Oscar will store coupons as well as credit cards, which is important as the Coupon business is considered hugely important to those who intend to generate revenue through advertising.
Having given up on getting a percentage of the transaction fee, the mobile operators are now hoping that coupon revenue will fund the deployment of NFC handsets, but that's not going to happen if Google and Apple are in control of that segment.
Apple and Google both see the coupons section of their e-wallets as critical revenue streams. Apple's wallet contains only tickets and coupons, for the moment at least, but Microsoft seems happy to let the network operators compete with app providers for that market rather than running their own couponing service.
Windows 8 Phone provides a consistent interface, not a competing service, and that could be as critical as any other feature Windows Phone can boast. It will be interesting to see how it picks up in the field with the average consumer.
The Android Wallet application will merge the two so that users shouldn't see the complexity, but when they change handsets or wireless carriers it might become more obvious to them.
By contrast, Microsoft is leaving the pay-by-tap business to the network operators, and has already signed an agreement with Orange for the first deployments in France although other mobile operators should be quick to jump as their collaborative efforts to create standard platforms come together over the next few weeks.
And of course, in the United States, that's under the ISIS brand. In the United Kingdom, it's known as Project Oscar and is being challenged by Google and PayPal who've complained that their inability to use the SIM is anti competitive. Both ISIS and Oscar will store coupons as well as credit cards, which is important as the Coupon business is considered hugely important to those who intend to generate revenue through advertising.
Having given up on getting a percentage of the transaction fee, the mobile operators are now hoping that coupon revenue will fund the deployment of NFC handsets, but that's not going to happen if Google and Apple are in control of that segment.
Apple and Google both see the coupons section of their e-wallets as critical revenue streams. Apple's wallet contains only tickets and coupons, for the moment at least, but Microsoft seems happy to let the network operators compete with app providers for that market rather than running their own couponing service.
Windows 8 Phone provides a consistent interface, not a competing service, and that could be as critical as any other feature Windows Phone can boast. It will be interesting to see how it picks up in the field with the average consumer.
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