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Transport for London ticketing chief dubious about mobile NFC

Sophie Curtis | Feb. 18, 2013
The mobile contactless payments industry is struggling to take off because there are too many stakeholders

Richard Johnson, strategy director at mobile payments company Monetise, added that the advent of mobile money is driving battles not just between these stakeholder groups, but also within them.

Banks are competing over who has the best mobile banking services, while operators and device manufactures are arguing over whether the NFC should sit on the SIM card or be integrated into the device. Meanwhile retailers are keen to protect their traditional revenue streams, and online advertisers are keen to open up new ones.

"The stakes are incredibly high for all these industries. There's going to be some big winners and some big losers, but the outcome is not pre-ordained," said Johnson.

Hudson said that running the Oyster card service in its current form costs 14 pence for every pound in revenue. TfL collects just over £3 billion in revenues a year, so about £400 million a year is spent on revenue collection.

TfL is currently trying to get this cost down from 14 pence to the pound to 10 pence to the pound, but allowing an array of mobile payments stakeholders to claim a slice of the pie could make it much harder to turn a profit, according to Hudson.

The question of customer service is also an issue that needs ironing out before TfL will be willing to consider mobile contactless payments. At the moment, it is not clear who a customer should contact if something goes wrong with their mobile wallet.

"Who do you call when it doesn't work? It's very clear with Oyster - you go and call TfL. Any other system that isn't clear about where you go will not work," said Hudson.

"When I'm doing transactions on my mobile phone, who do I contact? Is it my operator? Is it the scheme? Is it the bank card that's linked to it? If it's confusing I won't use it."


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