So Gemalto just announced their “payez mobile” initiative with five major French banks. In other words, Gemalto is becoming the de facto single TSM (Trusted Service Manager) for financial institutions in France (these five banks probably represent 90% of the retail banking market in France). This is good news for Gemalto, but also for the whole NFC ecosystem. And this, for two reasons.

The first reason is that banks need one centralized TSM to ensure that their NFC services can reach 100% of their customers, regardless of the mobile carrier, and in exactly the same conditions. If a bank has to rely on one mobile carrier to activate their services on mobile phones, they potentially cut themselves out of 2/3 of their customers. Moreover, by signing-up to a mobile banking service, the user would reduce his freedom to switch to another mobile operator as easily as today. In the case of one single centralized TSM, the portability of phone numbers and banking applications should be made possible and easy.

The second reason why we welcome this initiative is that it makes it much easier for the rest of the NFC ecosystem (especially on the service side) to move in one single direction. Coordination and “standards” are always good to develop a market.

The “payez mobile” initiative in France can actually be linked to the “NeuCom” initiative in Taiwan (see 2 posts below), where the Taiwanese government decided to allow/promote the emergence of one single “neutral” TSM for whole retail banking market (note: the efficiency of such a neutral TSM still needs to be proven). So whether it is a private initiative like in France, or a government initiative like in Taiwan, we are seeing that some mature markets are opting for centralizing the OTA secure activation of financial services in the hands of one single TSM. If “payez mobile” and “NeuCom” were to set best practices for TSM, we might well see the TSM market turn into a national bidding market (like e-passport for example).

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