NFC Service Launch in Hong Kong

Alex Kun

SVP, Product Development and Management

Wireless Business

25-06-2013

Latest Contactless Development Landscape

Octopus in Hong Kong

• 21 million cards issued

• Acceptance covering major public transports and retails

• 5,400 merchants and 12,000 points of sales

• Over 65,000 readers deployed including transport

Card Schemes in Hong Kong

• VISA – More than 1 million payWave cards

issued in 5 years

– 9,000 points of sales

• Mastercard – First PayPass card issued 2 years ago

– Deploying POS terminals with major banks

• UnionPay International – Actively introducing QuickPass services in

HK

Octopus for Transport

Contactless Infrastructure

VISA

payWave 9,000+ POS

Mastercard

PayPass

China UnionPay

QuickPass

Octopus 12,000+ POS

Merchant

Loyalty

Merchant

Stored Value

Resident

Card Staff

Card

Integrated Environment

In the Era of NFC Mobile Payment

HSBC

Hang Seng Bank

Bank of China HK

Octopus

Major financial institutions in Hong Kong have launched or

announced NFC mobile payment services

Secure Element Selection

Hong Kong is Food Paradise

TSM Infrastructure Development

MNO-TSM

SP-TSM

SP-TSM

Bank Host

Bank Host

Member

Bank 1

Member

Bank 2

Beyond Payment

Smart-Poster

For

Advertising

Sharing of PCCW-HKT Field Experience

NFC Project Overview

• Project Scoping

• Role & Responsibility

Definition

• Implementation

• Integration within Bank

Infrastructure

• Credit Card Product

Design & Validation

• IT Auditing &

Compliance (HKMA)

• Implementation

• Integration within

Telecom Infrastructure

• SIM Card Product

Design & Validation

• Handset Qualification

• Compliance (OFCA)

• End-to-end Acceptance

Testing

• Market Intelligence

• User Experience

Roadshow

• Customer Service Flow

Definition

• Launch Plan Definition

• In-house Training

• Customer Education

• Service Launch

• Service Review

• Operation Review

Bank

Mobile Operator • SIM & Handset Sourcing

& Ordering

• Merchant Education

T=0 T+1 T+4 T+7

Wallet Security Design

Credit card in SIM is not active

by Default

User has to click “Pay” to

confirm the intention of paying

Wallet is PIN protected to

avoid unauthorized use

HK Monetary Authority and Bank Association review from time to

time to ensure security level to give the greatest confidence to public

NFC Roadshow and Results • Roadshow organized to introduce NFC and Mobile Payment Service to

PCCW-HKT Staffs. 8-day Roadshow in 4 Locations

• Around 1000 staffs visited; More than 70% registered for New Mobile Payment Services

• General Feedback or Generally Asked Questions Q1. Easier to lose handset than wallet. High risk?

A1. SIM is as secure as credit card. PIN also available to protect from unauthorized use of credit card.

Q2. What handsets support the service?

A2. Samsung Note II/S3/S4, Sony Xperia Z, HTC One. More under qualification

Q3. Only one credit card or only one bank?

A3. Same SIM card can host several credit cards from different banks. Other applications are coming.

Q4. What make you use NFC? (Questionnaire question to visitor)

A4. Convenient and trendy

Information Subscription Equipment Installation Usage Customer

Support

Necessary Cooperation on Service Activation and Customer Support

From Bank or MNO, refer customer to each other

Compatible handset and SIM; eligibility check by MNO

Apply for mobile payment service; process owned by Bank

Download (or Preload by MNO) of Wallet

Transaction managed by Bank

Mobile Users contact MNO to support on Mobile Services

Core Values of MNO • Efficient Logistic Management of SIM for 15 Years

• Effective Issuance and Life-cycle Management of SIM

• Effective Management of Mobile Subscriptions

• Provision of Security Domain in NFC SIM to Banks

• Full Understanding of Customers’ Needs on Smartphone and Mobile Services

• Promotion of Mobile Services including Mobile Payment

• Rich Experience in Customer Education for New Services

• Fast Penetration of NFC-enabled Phones (Service-bundled)

• Handset Qualification and On-going Management of Handset Firmware

• Customer Support with Well-trained Staffs

Key Success Factors • Common Ecosystem

– Close cooperation with a wide range of partners (financial institutions, transportation, technical suppliers, MNOs...)

– Respect partners’ core value

• Open Architecture and Standard – NFC Services, Devices, Trusted Service Managers, Secure Element,

MNOs...

– Adopt industry standard

• Security – Personal data must be securely stored in SE and managed via TSM

– Service should be peace of mind

• Portability – Continuity of services is important when changing handsets

Only possible using SIM card as a Secure Element

NFC = Not Feasible without Cooperation

Thank You!