86 percent of industry stakeholders believe NFC-based proximity payments will be adopted based on a ‘Collaboration Model’ between banks, mobile operators, merchants, handset manufacturers and other service providers, according to a report.

Researchers say that this collaboration model remains the most feasible scenario since rapid adoption is hampered by the big number of players in the industry. Despite the industry’s enthusiasm regarding the deployment of mobile payments services, analysts see a strategic deadlock in which stakeholders are awaiting for someone else to make the first move. According to analysts, a bold move is needed by a player in the role of trusted service manager to orchestrate the activities of collaborators and competitors.

Researchers reveal that the mobile payments landscape continues to evolve with various business models emerging worldwide. The report presents four potential mobile payments business model scenarios discussed with interviewees: the operator-centric model, the bank-centric model, the peer-to-peer model and the collaboration model. In the first scenario, the mobile operator acts independently to deploy mobile payment applications to NFC-enabled mobile devices, for both postpaid or prepaid subscribers, whereas the second one relies on the initiative of a bank which deploys mobile payment applications or devices to customers and ensures merchants have the required POS acceptance capability. In this latter scenario, payments are processed over the existing financial networks with credits and debits to the appropriate accounts. The third discussed framework is defined by an independent peer-to-peer service provider which offers mobile payments between customers or between customers and merchants. The last model is based on a collaboration among banks, mobile operators and other stakeholders in the mobile payments value chain, including a potential trusted third party that manages the deployment of mobile applications. In this scenario, payments are processed over the existing financial networks with credits and debits to the appropriate accounts.

The survey was conducted by members of the Smart Card Alliance Contactless Payments Council Mobile Payments Group, by either in-person or telephone interviews during December 2007 and January 2008. Stakeholder views were collected from financial institutions, mobile operators, merchants, potential trusted service managers, service providers and non-traditional players. The report includes detailed results describing the survey respondent’s perspectives on the pros and cons of each model and on their opinions of potential new sources of revenue from advertising, loyalty and rewards, co-branding arrangements, and customer fees for new services.