Can independent Trusted Services Managers (TSMs) flourish?

The concept of Trusted Services Managers (TSMs) has always intrigued me. The need for industries, as diverse as, telecom, transit and payments, having to work together is a daunting prospect. A neutral third-party, aka TSM, seems like a natural fit to facilitate interactions between these industry players, each of whom have different approaches to the same problem.

As we extend the concept of TSMs to reality, some wrinkles appear.

An observation that is common across NFC trials is about the number of partners (last count there were 6-8 partners) that need to be coordinated with. The complexity resulting from the number of partners is a hurdle, especially as one goes past trials and plans for commercial deployments.

TSMs also provide OTA services. Traditionally, OTA services have been provided by the card issuer, among others. In the telecom world, the telecom service provider (telco) have provided OTA services themselves, using OTA platforms from third-parties, such as, SmartTrust.

Reading between the lines of what telcos are saying and doing (around NFC trials), it appears that in the brave new of world of NFC, the telco will continue to provide OTA services. From a telco's perspective, this reduces the number of interfaces/participants to work with. Additionally, as ETSI has adopted the Single-Wire Protocol (SWP) as the standard, the SIM has become the secure element of choice, and the telco the issuer of the secure element. At the least, the telco would like to paint such a picture. Against this backdrop, the telco has a vested interest and a supporting business model (managing the secure element real-estate) to manage the relationships with third-parties, including banks and transit operators.

Alternatively, the SIM card vendor (G&D, Gemalto...) are better positioned to work with telcos to manage the SIM/secure element real estate, and have good relationships (both business and operational) with payment card issuers.

While TSMs (Venyon, Cassis...) would continue to be in the news for the next 3-5 years as the NFC ecosystem ramps up, it is uncertain whether independent TSMs (TSMs that are not part of SIM card vendors, telcos, financial services providers [e.g., First Data] ) would be able to succeed thereafter.

A question to ponder: What kind of business and usage models would enable independent TSMs to flourish as the NFC ecosystem ramps up and consolidates?

Innovations, such as EMUE's card, can get us going again

Very rarely do you see so much buzz about a new payment technology as EMUE's display cards. This is indeed an exciting innovation. This card has the thickness of a traditional credit card, while it has a 8-digit display, 12 digit keyboard and a battery that last 3 years! Wow, this is truly amazing.

This product has the potential of being applicable in a variety of markets, including the US.

The ability to leverage the above product features to support MFA (multi-factor authentication) using a single device is what makes this product exciting. To appreciate this innovation, compare against the Gemalto CAP (Chip And PIN) reader being tailor-made for Barclays (PINsentry) to support MFA for online commerce. Who would want an add-on device if your payment card can do it all? The additional cost of the EMUE card (costs 5 times as much as an ordinary card to manufacture) looks inexpensive when compared to shipping CAP readers to customers.

I see an immediate opportunity to use this card for MOTO (Mail Order Telephone Order) transactions. Visa is piloting this card with bank(s) to complement VbV (Verified by Visa). I am not sure that the problems that merchants and consumers have with VbV will be addressed by using EMUE's card.

You get so excited when you read about such innovations that you forget that the economy is supposed to comatose.