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2 NFC (Near Field Communication) was Hot Keyword at MWC 2011 NFC Based Mobile Credit Payment NFC Based Mobile Payment for Public Transport

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4 NFC Based Mobile Smart Life ※ Mobile credit card, e-Money, P2P credit transfer, Mobile coupon, Membership, etc Door Lock P2P Payment Ticketing Healthcare Parking lot SMS Voice Data Entertainment 화 Smart Coupon Menu Order Smart Guide

5 Comparison of NFC and other services

6 Forecast of Global Market (Unit : hundred million dollar) NFC Market Mobile payment 11,300 3,700 NFC market (2014) ,100% 2014 (Unit : million) 3,572 Usage of Mobile Payment NFC Based Devices (8.3%) 2,763.3 (85.9%) (Unit : million)

7 Status of NFC based mobile service in Korea and abroad AbroadAbroad DomesticDomestic Infrastructure is in the early stage Major companies such as Apple and Google aggressively make efforts to pre-empt the global market. - (Apple) NFC based e-ticket patent application and next generation terminal to introduce NFC payment services. - (Google) Launching NFC supported terminals and acquiring key technologies to secure the basis for advancement. insufficient implementation of the NFC based infrastructure - (Payment machine) A small number of terminals can be updated for smart mobile payment service. Most of them require replacements. - (Terminal) smart mobile payment terminal (SHW-A170K, Galaxy S2 )will continue to expand. A small number of companies such as NXP occupy more than 80% of the market in NFC chip/controller. - (NXP) with more than 80% of the NFC chip market. Recently, it signed a strategic partnership with Google for smooth NFC supplies. - (STMicroeletronics) occupies 80% of the domestic transportation card market. 5-6 NFC chip and solution companies are emerging. - (Samsung) Declared its attempt to enter the NFC chip market. Will start mass production in 1Q of (USIM) The domestic USIM makers will develop the NFC based USIM and deliver them to the domestic mobile communication service providers.

8 Significant Implications

9 ① Common Infrastructure ② NFC-Equipped Teminals ③ Standardization of Service ① Common Infrastructure ② NFC-Equipped Teminals ③ Standardization of Service ① P2P Payment ② Personal Authentication ③ Smart Information/Ad ① P2P Payment ② Personal Authentication ③ Smart Information/Ad ① Security Technology ② Smart Wallet Technology ③ Testbed ① Security Technology ② Smart Wallet Technology ③ Testbed

10 Common Infrastructure and Standard NFC based mobile application service standard development ① (Wide spreading of the international standard) Create various smart mobile application services. ② (Application standard development) Need to develop standard for highly competitive NFC services  ITU has to play more active role Common infrastructure for NFC based mobile payments KCC, Telco, Credit Card Companies, VAN, KISA, ETRI, and MOIBA, etc. will participate in it. Operation committee Infra Pilot Tech development Standard `

11 Terminal NFC … Terminal to be launched - Formulating and recommending the guideline for NFC equipped phone Terminal launched - combine alternative technology

12 Direct communication between NFC mobile phones to support credit payment/wiring/file exchanges Detects the tag information to provide customized ads/information. Use with a built-in credit card or ID to support use for payments, tickets Support NFC based application services Mobile PaymentMobile TicketAccess Control Information Service (Smart Album/Smart Poster/Smart Station) Business Card Exchange/File Transfer … One Touch Calling Service Credit Payment /Credit Transfer Receipt P2P PaymentMobile Coupon

13 Leading the next generation mobile payment and application service markets Developing terminal security platform technology to prevent information leakages caused by loss or theft, access of unauthorized users to illegal data. Developing technologies to protect smart phone users and mobile service from malignant traffic & to prevent arbitrary manipulations by other users Security platform S/W development Developing smart wallet technologies for NFC based payment and authentication in a smart- phone ※ Credit card, Public certificate, ID, Personal Information management Developing domestic smart payment and integrated authentication technologies for the growing NFC based business. Build pre testing environment for the compatibility and service performance of NFC service and terminals before entering the commercial market.

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