Summary:
Mobile phone technology has had a profound effect on our society and Near
Field Communication (NFC) has become one of the promising technological
developments in IT industry. NFC is one of the latest wireless communication
technologies. As a short-range wireless connectivity technology, NFC offers
safe yet simple and intuitive communication between electronic devices. We will
review the mobile payments space by giving an overview, examining mobile
payments technology, assessing mobile payments in South Africa, analysing the
various critical success factors, and examining the various governing
legislation that exists. We will review various mobile payment solutions
currently in use that are based on bank accounts, credit cards and mobile
telecommunication company billing systems. These technological solutions
include Short Message Service (SMS), Unstructured Supplementary Service Data
(USSD), General Packet Radio Service (GRPS) or 3G (Third-generation), Wireless
Application Protocol (WAP), J2ME, Location-Based service (LBS), Near Field
Communication (NFC), and Interactive Voice Response (IVR). We will then take a
look at the mobile payments space in South Africa. This will involve reviewing
some of the major stakeholders and players. Popular mobile payments solutions
in South Africa include Wizzit mobile banking, MTN Banking, and FNB cellphone
banking. The mobile network operators include Vodacom, MTN, Cell-C and the
virtual mobile network operator (VMNO) Virgin Mobile. The other important
stakeholders include the big four banks, electronic payment network operators
Visa and MasterCard, and specific merchants. Reviewing the various challenges
faced by mobile payment solutions will give this research weight. These
challenges include critical success factors such as dealing with the dynamics
of different stakeholders with conflicting interests, consumer behaviour,
costs, trust and security, usability, and lastly legislation governing mobile
payments. Moreover, we we will indicate ways the growth of electronic payments
can substantially reduce the social cost of a country's payment system. We
provide an estimate of the potential savings in social cost and determine the
responsiveness of payment users when relative prices are used to speed up the
substitution of electronic and especially mobile-based for paper-based
payments. Then, we will explore the various business models being proposed and
applied during the implementation of NFC mobile payments. The various
stakeholders that are part of the NFC mobile payment ecosystem will then be
studied and lastly the benefits and challenges associated with NFC mobile
payments will be noted. Finally, we will review real options methodology to the
investment-making process.
Keywords:
Field Communication, m – banking , m – payments, Telecommunications
