The GSMA mobile operator trade group is proposing a global standard for how point-of-sale terminals talk to NFC-enabled mobile wallets to enable consumers to redeem coupons and rewards.
The proposal calls for point-of-sale terminal makers to adopt technical specifications to communicate with couponing and loyalty applications in the wallets, and enable redemption of the value-added services, possibly at the same time as the consumer makes a payment, with a single tap or two taps.
The association proposes the communication between the NFC phone and POS terminal use NFC’s card-emulation mode, which requires an application to be stored on a secure element in the phone, even though these types of applications don’t usually require the level of security that secure elements provide. But most contactless POS terminals only support card emulation, and NFC-based payment is now conducted in card-emulation mode.
Perhaps not surprisingly, the GSMA proposes that the couponing and loyalty application be stored on NFC UICCs or SIM cards that member mobile operators would issue. That’s in addition to mobile wallet apps that support the value-added services.
In announcing the proposed “open-source” standard, Pierre Combelles, the GSMA’s business lead for mobile commerce and NFC, said in a statement that while payment is the “use case most widely associated with NFC,” many in the industry see the “greatest benefits of NFC coming from the additional services it is able to support at a retail checkout, where it allows for a fast, intuitive and accurate way to use cards and vouchers when completing transactions in-store.”
He said “feedback” from retailers that a lack of a standard for managing loyalty cards, coupons and vouchers in mobile wallets was a “barrier to the development of these services.”
The GSMA is asking for comments from merchants, loyalty and couponing scheme operators and third-party developers, along with suppliers of POS terminals and software providers on the proposed technical specs.
The association would offer wallet APIs to third-party developers, hoping to attract small to medium-sized development firms, to create wallet applications, said the group.
This apparently refers to the user-interface apps or applications and not the loyalty, couponing or other value-added services applets–or “cardlets” as the GSMA calls them–on the SIM cards.
The GSMA calls these the VASAppCardlets, based on Java, which would probably be developed by SIM card companies. Trusted service managers could provision the loyalty and couponing cardlets over the air on the SIMs, said the association.
But the fact the communication for the loyalty and couponing application has to run through SIM cards could make for fragmentation with any global standard.
There is increasing interest in embedded secure elements in NFC phones, which also could support the loyalty and couponing applications in card-emulation mode, similar to what Google has attempted to do with the SingleTap feature of its NFC-enabled wallet.
And the proposed standard also wouldn’t cover other ways to communicate between NFC phones and POS terminals or servers to collect or redeem coupons and rewards. These could possibly use NFC’s other communication modes, peer-to-peer and tag reading–though they could not be combined with NFC payment because of the latter's use of card emulation.
The proposed standard would not cover communication or data formats between the POS terminal and cash registers and back-end couponing and loyalty servers.