NFC could be launched in Brazil this year, but it still faces great challenges


Near field communication (NFC) is on its way to getting launched in Brazil and could become a reality at the end of this year, told RCR Wireless News Mustafa Almansur, NFC programme leader for the Brazilian market at GSMA, a global association whose members represent more than 5 billion GSM and 3GSM connections. NFC is no longer a distant reality and the challenge is not too big, since the Brazilian ecosystem is no less ready than many in Europe and the Far East.

>>> Listen to Almansur’s interview .

During the GSMA’s Mobile NFC event, held January 18 in São Paulo, the association aimed to show that NFC is moving from trials to its first commercial launches. Some carriers and telecom player representatives also told RCR Wireless News that they expect some NFC application launch for this year. However, it is likely to be an initiative in a niche market involving few players, involving a partnership between a bank and an operator.

Indeed, Brazilian mobile network operators (MNOs) have carried out a number of trials with Banco do Brasil and Viva and Vivotech, however GSMA only started to work more closely to operators six months ago. The GSMA’s NFC go-to-market programme focuses on expanding collaboration, interoperability and ecosystem development. “Without all the MNOs engagement we do not have NFC,” said Almansur. He noted the environment is complex and it takes more than one player to work this out.

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GSMA says there are 26 NFC handsets in the global market and six available in Brazil. The challenge ahead is about ecosystem readiness. Are service providers, consumers, merchants and handsets manufacturers ready? The concerns are related: if users are prepared they will adopt the new technology, and merchants will expand their contactless infrastructure.

NFC enabled device penetration is also a concern. “Handsets should be available, useful, affordable and convenient to get users to use NFC,” said Almansur, adding that a teaser application would be great.

Next steps
During the conference there was a consensus that even though the technology is ready and tested, NFC projects have not taken off yet because it is unclear which player will invest in the first place. The business plan is not set yet – and for many years the battle between banks and carriers has delayed mobile payment projects.

“MNOs are solely responsible for NFC handset penetration, while merchants should invest in upgrading POS (point of sale) to contactless,” noted Mustafa Almansur, NFC programme leader for Brazilian market at GSMA.

One the manufacturers’ side, Samsung, RIM and ZTE agreed that the penetration is not high because there is not demand yet. “There are two challenges to NFC in Brazil: the first one is standardization and the second is how to convince users it is interesting and secure [to use mobile as wallet]. I believe there’s still resistance from the consumers,” pointed out ZTE’s technical director Celso Pagotti.

RIM’s Frank Maduri shared Pagotti’s opinion, saying the question is how to make users adopt NFC. “It’s necessary to increase NFC’s device penetration, as well as to teach people to use it and to break entry barriers, for example showing elementary functions first,” he said.

“It is important to build an ecosystem from the user experience, because NFC needs to generate value to all stakeholders,” added Samsung’s Robson Lisboa.

The standardization and collaboration can drive five key macro socio-economic impacts, according to Ysbrant Marcelis, from Booz & Co. They can: increase competition, attract more consumers, increase financial transparency, improve public sector servicing and reduce the carbon footprint where listed. Marcelis also highlighted key areas to focus on beyond payment processing: data analytics shopping and marketing.

“Brazilian market can absorb handsets. We need to break down entry barriers. Carriers believe in NFC as well as SIM secure element,” concluded Ricardo Malizia, from Claro.

During the Mobile NFC conference, the São Paulo public transportation SPTrans’ superintendent José Aécio de Sousa said that company is going to change its data center supplier which also provide bus and subway ticket cards. “We will replace them and NFC is considered as an alternative. This is a great opportunity for a NFC application,” Sousa noted.

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