Analysis of the Norwegian NFC Mobile Payment Business Ecosystem

Near Field Communication (NFC) has for a long time been assumed to become the technology that would finally bring mobile payment services to consumers on a large scale. However, a broad adoption of such services still remains to be seen. In Norway, the most prominent bank and mobile network operator created the joint venture TSM Nordic with the purpose of releasing the mobile payment wallet application, Valyou.This payment service solution requires the establishment of a new payment ecosystem, based on the existing payment and mobile network infrastructure. The inclusion of new actors, and changing the roles of the existing ones, have made this introduction process and the resulting ecosystem both complex and challenging. After many years of testing and development, Valyou will finally be released in 2014.This master thesis describes this business environment and its involved actors from a business ecosystem perspective. Building on a series of interviews and reviews of relevant literature, the study assesses challenges for TSM Nordic in making this ecosystem sustainable and suggests how this development can be approached.THE NORWEGIAN NFC MOBILE PAYMENT BUSINESS ECOSYSTEMThe analysis of the conceptual mobile payment business ecosystem identifies 13 roles needed in any NFC based mobile payment ecosystem. Furthermore, the Norwegian actors within each role are presented. As the value creation in the ecosystem is proportional to the number of consumers adopting and using the mobile payment service, the four roles with direct ties to the consumer were assessed to be key roles. These are: 1) TSM, 2) bank, 3) mobile network operator (MNO) and 4) merchantThe other involved roles are equally important for the ecosystem to be fully functional, and serve as enablers for the services.CHALLENGES IN ESTABLISHING A SUSTAINABLE ECOSYSTEMWith the basis in the described ecosystem, this report assesses the challenges of enhancing its sustainability. The findings in the study indicate that the main issue in establishing a sustainable Norwegian mobile payment business ecosystem is the chicken-and-egg paradox relating to merchant recruitment and consumer adoption being paralyzed by each other s hesitance to join the ecosystem. Related to this circular key issue, other challenges are also identified, and this can be summarized as follows: 1) Consumer adoption poses a challenge because of: An insufficient amount of merchants having activated the necessary infrastructure Limited