Telecommunications operators may become the biggest stakeholders in the future NFC payments market in case the SIM card will house the so-called Secure Element (SE), which stores the payment data. This is the conclusion of a report on NFC payments produced by the Dutch technology think tank Rathenau Institute and cited by Webwereld.

NFC mobile phones include a multi-application smart card chip, which can host several applications. The SE can mix all current range of smart cards in a client’s wallet to a single chip inside of the mobile phone. The SE can have several form factors: a SIM card, a secure flash card, or an embedded security controller. 

In the NFC payments ecosystem, all security-relevant transactions and data will be handled by the SE. Although basic functionality of different types of SEs is very much alike, there are unique features supported by all of them.

There is a looming problem around the SE, according to the Rathenau Institute. The SE on a SIM card is bringing "a conflict of interests" between the involved stakeholders, the research says. The stakeholder who manages the SE, essentially manages the access to the user. In this context, telecommunications operators will probably charge high fees the other stakeholders for using their SIM. Moreover, if the SE will be part of the SIM card, telecommunication operators will also limit the users’ freedom of choice, the report suggests. A SIM card which is designed for a subscriber token for wireless networks is also strong candidate for being the main stream SE, researchers believe. However Rathenau concludes that the SIM card will be the primary choice for the SE.

Besides the SE dilema, researchers spotted another problem in the NFC ecosystem: the number of parties involved, namely handset manufacturers, chip manufacturers, telecommunications companies and banks. Researchers believe this is why there is a need for a party that can serve as the access point, called Trusted Service Manager (TSM). A TSM acts as a neutral hub within the NFC ecosystem stakeholders by providing a white-label business model through a hosted service. Some companies have already showed interest in fulfilling the TSM role, but what exactly TSM will do and what requirements must be met is unclear. The think tank believes the Trusted Service Manager may also have a role towards the consumer. The TSM would be able to ensure that the Secure Element on the SIM card is put on as the user changes MNOs.

In the absence of a TSM, researchers say the NFC ecosystems would be threatened by a chaos in data traffic. The institute also suggests that the Dutch Governments should keep an eye on the TSMs, since the NFC users’ personal data are used in the NFC payments process. The think tank also warned that there is not enough research produced related to the users’ data safety in a NFC payments scenario.