NFC in the Middle East
With a young population, a booming bank-card market, high levels of mobile phone usage and a dynamic economy
With a young population, a booming bank-card market, high levels of mobile phone usage and a dynamic economy, it’s no wonder Turkey was the first country to launch NFC back in 2010, where mobile phone operator AVEA partnered with Garanti Bank to launch their BonusluAvea NFC service and mobile operator Turkcell launched of its Cep-T Cüzdan platform.
NFC services first focused on payments, and as the services developed they began to include transport and loyalty. Turkey is well known for being very advanced in the use of mobiles for payments and transport. Gemalto carried out a survey last year and the results showed that 13% of Turkish respondents are already using contactless services. This is quite a significant adoption rate. The second hot spot in the MENA region is of course Dubai, where RTA announced they will be releasing NFC ticketing services this year.
NFC standards have been defined and the technology is there, available, meeting all the required security standards and certifications levels. However, the introduction of new technologies and NFC services to the market takes time as it requires the adoption of local ecosystems and business models involving many players such as banks, transport companies, telecom operators, retailers, merchants, OEMs etc. The beauty of NFC is that the whole payment technology system is interoperable, everything has been standardised by industry groups such as Global Platform and EMVCo to ensure consumers can enjoy a seamless experience everywhere they go. So, NFC will rely on a very strong interoperable baseline.
The main challenge is still the contactless infrastructure at point-of-sale and other readers for the field. Obviously rolling out NFC infrastructure takes time, the migration to NFC-enabled POS infrastructure doesn’t happen overnight. However, the banks are committed to doing it across the globe and if we look at the latest reports from ABI research, 85% of POS terminals will support contactless payments in 2016. This mean that in the coming years, the world will be more able to enjoy NFC services everywhere and NFC technology will increasingly demonstrate its full potential, addressing the masses and being available anywhere, anytime.
For NFC to become commercial we also need a strong partnership between Banks and MNOs, if one party tries to do it alone, it won’t be a success, when they decide to partner, projects can achieve the necessary scale to be attractive for the consumers. Today we can see that the people operating NFC projects are the tier one banks and MNOs, as they have more free reign to try this. Looking at the MNOs, in both Europe and the USA, they are already on board. For the banks, it is a bit slower, which makes sense as they need the MNOs to be ready, however tier one banks are investing heavily now.