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Android jumps on the NFC bandwagon

As many of the authorities agree, Android is the most promising mobile platform. It is now the second after Symbian (bypassing iOS) and it is on the rise to the top. NFC support for Android was already under development and it was rumoured that the latest Android version 2.3 Gingerbread will officially support NFC. This was confirmed at the Web 2.0 Summit during the discussion session with Eric Schmidt, the CEO of Google with Tim O’Reilly and John Batelle.

He even demonstrated an NFC tag reading application that opened the location of the tag on Google Map. The full session can be watched on Youtube here.

After Nokia and Apple’s patents and applications on NFC, now Android has committed in to the NFC space. In general, banks and telco operators have already had many pilot programs and now the picture is almost complete with one little actor missing: the device manufacturers! Unfortunately there are too little number of handsets with NFC support.

Anyway, let’s look at the bright side. Now that all major mobile platforms officially support NFC, application developers can have a wider range of users. Mobile application markets have already solved the distribution problems, now the it is time for the -hopefully- gold rush!

Here are an idea of an NFC project other than obvious payment and ticketing applications:

Imagine check ins with Foursquare over the NFC tags attached to the cashier desks of the venues with NFC supported handsets. These tags (not necessarily just tags) can offer discounts based on the check ins for a specific time frame. Or even based on a pattern like buying gas from a certain network and then buying food from a certain supermarket chain. It can even trigger a payment application residing next to the coupon application.

The only question remains here is when?

Mobile contactless payment white paper from EPC and GSMA

With the release of Mobile Contactless Payments Service Management Roles Requirements and Specifications white paper prepared by EPC and GSMA, I think I have now the responses of my post on practical barriers of NFC.

EPC is the decision making and coordinating body of banks regarding payment for EU region. The main reason of EPC’s existence is to develop and maintain the SEPA (Single Euro Payments Area) and I believe they made a good job so far. And GSMA represents the interests of the worldwide mobile communications industry in 219 countries with nearly 800 mobile operators and 200 more companies within the ecosystem of mobile networks.

So, the co-operation of these two organizations on mobile contactless payments definitely filled a gap in the NFC related mobile contactless payments space. Now banks and mobile network operators have a reference document defining the commercial relations, technical roles, operational workflows and most importantly a single user experience approach for the customer. Although I am still not sure how much binding will this document be for the banks and mobile network operators but it will definitely help new projects.

The main highlights of the document are;

  • Setting the definitions of all context
  • Defining clear explanations of the roles
  • Defining the lifecycle management of the mobile contactless payment application
  • Examples of various scenarios of mobile contactless payment implementations between banks, TSMs and mobile network operators.
The below figure is an extract from the document which I believe is the heart of the document defining the lifecycle starting from the application to termination of the service.
I think anyone interested in the subject must read the paper which can be download from here.

A mind opening article on NFC

I bumped into this post on Contactless Payments group on Linkedin, which is about a great article on NFC Should Stand For “Needs Further Clarification” by Nick Holland from Yankee Group. I find the article very mind opening, especially for the banking/card payment world planning pilots/projects on NFC.

The adage “if all you have is a hammer, everything looks like a nail” is an apt description of current payment industry thinking. What is the most obvious use of contactless technology? Payment card. What does everyone want their phone to be? Payment card. What is your favorite color? Payment card.
Please read the full article on StorefrontBacktalk. Nick very well puts the ugly truth that NFC does not only mean processing a contactless payment transaction from the handset. A clear value proposition -other than the payment itself- must be defined for the contactless environment for an NFC payment application over the handset to be successful.

Embedded contactless reader for PCs from Sony and HID

Sony announced a very good news today for the contactless world. Sony and HID Global forms an alliance to create an embedded contactless reader for PCs. Sony, being one of the pioneers in the contactless technology, will be incorporating with HID, which acquired Omnikey -one of the best PC connected reader manufacturers, for building an embedded contactless reader.

Sony is already an influencer of contactless technology; they own their own contactless chip –Felica– and they are playing a huge role on the NFC area. Needless to say, Sony has huge opportunities on their home entertainment products from Play Station 3 to wide screen TVs and Vaio laptop line up for integrating with NFC based chips.

On the other hand, HID has a wide range of products in identity and security markets. I personally admire the PC connected Omnikey readers a lot, very robust and has a great support in terms of drivers and software.

I believe a contactless reader may eventually become a standard peripheral device for PCs, if this attempt is successfully completed. I can imagine how wide range of applications can be developed once the computers have embedded contactless readers. People can top up or check their balances/transaction history of transportation cards at home, (which is already being done in far east right now) process credit card transactions for shopping online or buy airtime for their NFC handsets. I had personally seen an embedded Felica reader in action on a Sony guy I had a meeting with, so this is not a long run. It just needs the right actors to be involved in the picture.

All contactless readers support both ISO 1443 type A and B, so these readers will support all current contactless chips that are available like Mifare, Calypso, Legic, etc. Of course that will bring a lot of political discussion over software and ownership of the reader IC, but for now let’s cross fingers for Sony and HID!

Paypal moves into contactless space

Paypal is definitely the most important online payment system provider in the online world. Yet, it seems they are quite enthusiastic about the real world. And of course, the leading online payment service provider goes for the coolest method; over the contactless interface! Near Field Communications World refers to the interview with the Paypal President Scott Thompson on The Wall Street Journal.

Transactions are processed by Bling Nation, so merchants need to obtain a BlingBox to accept Paypal contactless stickers. Paypal customers must get the contactless sticker from a Bling merchant prior to making a transaction. The sticker is supposed to be attached to the back of the handset.

The big picture suggests that Paypal customers will be able to access their accounts in real merchant locations via their contactless stickers attached to their phones. According to Bling Nation, sticker is compliant with NFC, so it will be available to customers without a stick when the secure element dilemma is resolved and ordinary people have NFC enabled phones.

There are no technical details on the payment application itself, so I assume it is secure enough to hit the streets. I think the below issues are very critical and must be addressed -if not already done so:

– The authenticity check of the card and the POS terminal
– The verification of the card holder
– Interoperability with the existing POS network with contactless readers

Anyway, it’s an interesting move for the contactless world from a strong player!

First MicroSD based contactless payment launch in Europe

Visa Europe and Akbank -one of the big fives in Turkey- announced the first MicroSD based contactless payment application in Turkey. Akbank, Visa Europe and DeviceFidelity attended the press conference.

As I already mentioned in a previous post, DeviceFidelity’s MicroSD product is a solid solution, especially for Turkey where contactless reader penetration is almost like %2 of total POS terminals -around 32.000 contactless readers are already installed. The projected target figure is %5 of total number 1.800.000 terminals. More than 2.200.000 Visa&MasterCard contactless credit cards have been issued in Turkey by 10 different banks. Contactless usage is on constant increase but not as much as anticipated.

I was unofficially informed that only Blackberry is supported for the time being, but I was unable to confirm it.

It’s a great success for Akbank to commercially launch a handset based payment application. Now I am waiting for the announcement of the availability of the application process as an Akbank customer, which will be by the end of this year!

NFC based check in process work flow

I have been on my summer vacation with my family and I had some thoughts on a contactless based check in service while waiting at the check in desk. I developed a process in my mind and after returning back, I bumped into a great article NFC – the future of the check-in process on NFC News. It is a very innovative idea to speed up the check in process and quite convenient from the customer perspective.

The bluetooth enabled contactless sticker is the key element as well as the contactless readers to be installed in the airport gates.

NFC based check in solution may lead to many more innovative ideas like connecting the customer to anther flight or hotel transfer, etc.

Here is the project I planned for a contactless check in process:

EMVCo released handset requirements for contactless mobile payment

By maintaining the specifications of the banking card applications, EMVCo has a huge effect on banking card business. Visa and MasterCard developed their own implementations (VSDC and M/Chip respectively) based on EMV specifications. They are almost identical, they have a few configuration changes. Contactless applications payWave and PayPass are also based on EMV specifications, however they were developed before EMVCo released a contactless specification.

It seems EMVCo is ahead of Visa and MasterCard this time, they released requirements for contactless payments by handsets. There are already implementations of Visa and MasterCard’s applications on handsets, but all of them have been dropped before launch -after pilot phase.

Basically, a mobile application is a user interface for accessing the EMV compliant payment application running on the secure element of the handset. Secure element can reside on the NFC controller of the handset or on the SIM card.

What EMVCo requires for these applications are;

  • Application should have a soft/hard key for easy access. If it’s a soft key, it must be accessible from the main/home screen.
  • Application should inform the handset/card holder when a contactless transaction is in place.
  • Application should be secured by a password and it should be configurable to enable/disable the application.
  • There should be an indication of contactless capability, just like the bluetooth icon.
  • Handset shall provide a mechanism to notify the application when it is powered off.

It is a good effort to draw the boundaries of the environment and will lead the players in the industry to have a single user experience. It seems we will see more mobile payment applications on the market -hopefully in the commercial level rather than pilots.

Original document can be found here.

Nokia : comes with NFC

Nokia has always been the pioneer handset manufacturer in the NFC environment since the beginning. Nokia released the SDK of handsets with secure elements located in the handset and in the SIM over SWP years ago. So, I had felt disappointment to hear that the long awaited handset supporting NFC Nokia 6212 was canceled.

Fortunately, Nokia announced that all new Nokia smart phones will support NFC starting from 2011. There’s even more; the secure element will be located every location possible on the handset, not only in the SIM. This means that every player in the NFC space will have their chance to play in the game. Near Field Communications World reports that Nokia Executive Vice President for Markets Anssi Vanjoki made the announcement on Mobey Forum‘s 10th year anniversary in Helsinki.

This is a great news, not only for NFC enthusiasts, but for Nokia, too. Nokia has fallen apart from the smart phone wars (in terms of application store-wise) and I think this will be a big step for Nokia in the smart phone market. I think a killer NFC application will help a lot.

Edit : Turns out that it will be a feature of upcoming Symbian 4 platform and only selected handsets will have NFC support. For details please see here.

No NFC support on iPhone 4

All those rumors on iPhone having an NFC chip inside turned out to be incorrect after yesterdays WWDC10 event. It seems there are also no plans in the near future.

NFC community was waiting this announcement in great excitement, since it would definitely boom the NFC era, but unfortunately it seems we will go only for Android in the near future. There has been news around the NFC APIs in the Android environment that they are stable now, depending on the hardware of course.

While Micro SD card based solutions are already out there awaiting for commercialization, I think that next big step now should be the availability of NFC chips and antennas in the upcoming Android devices.