(with inputs from Nikhil Pahwa)
Ojas Venture Partners funded mobile payments solutions company Tyfone has partnered with First Data to enable mobile contactless payments on mobile handsets which are not NFC enabled. NFC, or near-field communications allows communication (as well as authentication of payments) without contact, and is widely used for mobile payments in countries like Japan.
While the announcement doesn’t exactly mention which market is being targeted or which partners have come on board, Tyfone’s rather interesting MicroSD card based solution appears to be suited for Indian market, where handsets with contactless payment solutions are not available. First Data will provide merchants and financial institutions with Tyfone’s Side Tap secure memory card and u4ia (pronounced ‘euphoria) mobility platform.
Over a year ago, NFC based consumer solution Tikitag had launched in India, but we’ve neither seen it in the markets, nor heard again about deployments in India.
Why Tyfone’s MicroSD Solution Is Interesting
The catch with contactless payment is that any device to be able to carry out such payments has to be embedded with near-field communications NFC chips; in most cases in India, for example with the Delhi Metro card, consumers are being issued separate cards. The problem with NFC deployments is that no handset manufacturer, except in Japan has taken on the additional cost and effort of embedding NFC chips in their phones.
The MicroSD card solution means that most mobile phones with a memory card slot can become a mobile contactless payment device: thus one doesn’t have to wait for a handset replacement cycle to finish, or for all handset manufacturers to come on board. A SideTap MicroSD card can be issued much the same way banks issue credit cards, and a single card could cover multiple services. The card works like a mobile wallet and it supports financial information and secure identification from multiple sources like retailers and financial institutions. The platform allows consumers to add new payment and identity options including coupons and catalogs. An added bonus: the card will also function as a normal memory card and will store multimedia content and information like any normal MicroSD card.
Tyfone has two more versions of the MicroSD card, Side Tap lite with OTA wallet functions but no storage memory and Side Tap ultralite MicroSD with OTA wallet for single payment provider and storage capability. Tyfone competes with DeviceFidelity, which also has a MicroSD card solution, and tied up with Visa earlier this year.
According to Strategy Analytics 900 million phones will be enabled with memory card slots by 2013 and Juniper Research forecasts that by 2012 NFC contactless payment global transaction value will exceed $30 billion.