NFC….THE FINAL PUSH Derek Daly, Sabin Tabirca University College Cork, Ireland
[email protected] [email protected] ABSTRACT Near Field Communications (NFC) has been a ‘buzz’ word since 2003. It is a contactless technology, enabling quick and secure functionality in numerous areas including mobile contactless payment, ticketing and data transfer. Everything about it seems perfect. But why has it been a ‘buzz’ word for so long and not yet a fully realised technology? This paper aims to answer this question and highlight the obstacles that the technology has dodged and the hurdles it has yet to leap. This paper identifies the struggles in trying to develop NFC applications for the Android platform. It outlines what needs to be done for NFC to succeed, while concentrating on Android. Keywords: NFC, hardware, contactless, mobile payments, NFC applications 1
INTRODUCTION
Near Field Communications works within the range of 10 cm. The range of possible applications for this technology is huge. Integrating NFC with Android is an area with huge potential, as the low cost of Android devices, such as the Huawei Ideos which at Sh8,000 (€71) is the cheapest smartphone in Kenya [1]. This factor alone will push Android in developing markets, where NFC could become a part of everyday life. According to a recent survey by Nielson 19pc of smartphone users worldwide have Android handsets. This number has risen from 8pc since January 2010 [2]. There is no denying these figures. 2
HARDWARE
After much research into the different hardware forms that could manage to be successfully moulded with an Android phone, an NFC enabled microSD card was the fore runner. Since mid to the end of last year three manufacturers [3[4][5] had announced the release of this technology, and one manufacturer was only weeks away from doing so [6]. Out of these manufacturers, Toppan Forms pulled the plug [5]. The problem is NFC enabled microSD cards should have been commercially available by now. University College Cork (UCC) contacted the companies directly (Tyfone, Device Fidelity, and Cell-Idea) and haven't gotten any real response. What is the holdup? The reason for this delay, in Tyfone’s case is funding (which they have received) and testing which is being undertaken [4]. UCC also contacted the Android NFC API developers (Stollmann [7], Inside Contactless [8], Trusted Logic [9]) for any advice as regards to testing their API's
but none have their hardware (e.g. Stollmanns 'Beagle Board' [7]) available quite yet. Apart from NFC enabled microSD cards the only real viable option to work with an Android phone is a powered NFC sticker. These have been manufactured by a French startup called Twinlinx. The product is called MyMax [10]. They have developed the technology, which communicates with the handset via Bluetooth. The stickers contain a battery. They cost between $30 and $40. They are going to be available for testing purposes in October, and have already been linked up with the French Cityzi project in Nice [11], where NFC trials are ongoing. But again this product isn’t available commercially and it will be next year at the earliest when it is. It isn’t available for research purposes either. From a development perspective this option will be a more complex process than just writing software to read and write to and from an NFC device because the sticker communicates with the phone via Bluetooth. The sticker interacts with an NFC reader/writer or tag and sends this information to the phone via Bluetooth and vice versa. They have a development kit available since June but it’s valued at €2000 which is way out of my budget (In order to get this quote you need to contact their sales team). This SDK includes some form of emulator which would be ideal for testing apps. With this SDK you can develop and test NFC apps for the MyMax sticker, without having the actual sticker. The fact that three companies have been made their open source API’s for Android available to developers [8] [7] [9], shows the huge potential for, and the interest in the combination of these two technologies. NFC is all about making life a bit
easier. It’s about enabling quicker payment, and a more straightforward way of keeping track of items such as receipts. But these types of applications aren’t going to push NFC into the mainstream. The technology needs some excellent uses apart from the payment, ticketing and access applications that are being pushed and tested by banks. 3
MAJOR PLAYERS RENEGING
Apart from hardware problems, there has been a huge amount of reneging on behalf of some key industry players on the release of NFC products. For example Nokia’s executive vice president for markets Anssi Vanjoki announced on the 17th of June this year [12] that all Nokia smartphones in 2011 would come with NFC. Then five days later they released a statement saying “We didn’t mean all smartphones would get NFC” [13]. Nokia is one of the larger companies that has been backing NFC since it’s inception and is one of the few manufacturers to have already released an NFC phone. They also have had other NFC products such as the 3220 NFC shell. They are a sponsor member of the NFC-Forum which is a non-profit organization promoting the technology. Nokia have been bouncing in and out of the limelight with their exploits in NFC. At the start of the year they cut short production of their long awaited 6216 classic NFC phone [14]. This was seen as another blow in the long list of obstacles to widespread NFC use. If Nokia really wants NFC to succeed, they need to do more. For instance they should include NFC in all their phones next year, especially all the Meego and Symbian ^3 phones they release. Nokia need to have a unique and powerful selling point if they want to continue to compete with Android, Blackberry and iPhone mobile platforms.
think the mobile world was ready for NFC. This was a huge disappointment as for the months leading up to the release they had patented numerous NFC ideas including turning the iPhone into an electric point of sale device, a system for e-tickets for concerts and events, and also a system turning an iPhone into a remote control for multiple home appliances [17]. These are just three of the several NFC specific patents that Apple has announced recently. Mr Jobs can obviously see the potential of the technology. Maybe NFC needs an organization like Apple to make it cool and drive adoption. Unlike Nokia and Ericsson, Apple really do seem intent on making NFC a success. The recent appointment of Benjamin Vigier [18] shows this intent. Mr. Vigier has been involved with NFC since 2004 as product manager for mobile payments specialists mFoundry, specializing in their mobile wallet project. His new role with Apple is mobile commerce project manager which more than hints at their focus on NFC. 4
PROGRESSIONS
Sony Ericsson, like Nokia is a member of the NFCForum and has made some similar claims, which so far look as if they are going to remain unfulfilled. On the 29th of June last year Sony Ericsson’s Vice President of Systems Architecture, Hakan Djuphammar declared “A year from now basically every new phone that’s sold will have NFC” [15]. Again it’s August and there is no sign of a new NFC phone on the market for this year and only rumours for next year. Sony Ericsson have filed patents for NFC applications such as the drag and drop function [16] that allows users whose phones are close to share files by dragging and dropping them from one device to another device. This patent was filed in 2007. Three years later and they haven’t included NFC in their phones.
When it comes to retailers, it’s another story. They have been slow to adopt the technology because of fears of larger transaction fees. In [19] out-law.com cites that retailers believe that banks are going to make transaction fees for contactless payments “exorbitant”. This idea has been tossed aside by the fact that UK supermarket chain Spar has decided to invest heavily in contactless payment due to low transactions fees [20]. Spar is setting up NFC systems in 2600 stores in the UK at a charge of £700,000. They will save 4c per transaction by not asking shoppers to enter their PIN. This of course is excellent for smaller transactions under £15. Spar believes it can save up to 40% on transaction charges by using NFC. If the majority of their transactions were under £15, their contactless transactions would costs them less than cash transactions, which currently cost around 2% of the cash to process. Maybe this fact would push merchants into accepting the technology. For these contactless payments, the shopper would be randomly asked for their PIN, based on their usage patterns for security purposes. It also creates a more efficient and quicker checkout than traditional credit card or even cash purchases. Like Spar, the Co-Operative in the UK is also starting to introduce contactless payments [21]. 100 of it’s food stores and 50 of its pharmacies are adopting an NFC infrastructure with the hope of most of their stores being NFC ready by the 2012 Olympics. This is a move in the right direction and is an important factor into urging other merchants into contactless payments.
After a slew of rumours citing that the Apple iPhone 4 would contain an NFC chip, the release in June this year disappointed. Maybe it was a physical issue such as not enough space or maybe Steve Jobs didn’t
In a Gartner report [22] on the top ten consumer mobile applications in 2012 NFC came in a less than average 7. Two financial transaction functions came before it. Number 6 is mobile payment particularly in
developing countries, usually done via SMS. The first on the list is SMS based money transfer, again mainly in developing markets. It is low cost and quick, but there are huge problems with security. It is also very open to fraud like money laundering, two things that need to be considered when implementing NFC. The interest pool in NFC is large. There are retailers, service providers, customers, mobile operators, banks, chipset makers, API developers, application developers, handset makers, trusted service managers and standardization bodies all vying to get a piece of the NFC pie. They are all waiting, ready to pounce as soon as they see the opportunity to make some cash. This dodging responsibility in order not to fail is the main hurdle for NFC and is to this day diminishing the uptake and even knowledge of the technology. According to a recent survey in June by Datamonitor [21], out of 1000 consumers surveyed 33% of them didn’t know what contactless payment was and only 38% said they would be interested in it. NFC needs one of the interested parties to take the technology and drive it into the public domain. PayPal seem to be keen to fill this gap. According to their boss Scott Thompson, “Mobile wallet solutions are [their] top priority”[23]. Their focus at the moment is on moving online payments into the retail sector. They are developing software enabling mobile devices, particularly mobile phones to act as ‘mobile wallets’. Their eventual aim is to cut out middle men, like the credit card companies. They are trialling the system in Palo Alto California using an NFC enabled (‘dumb’) sticker which has an id number which is linked up to your PayPal account. Your account gets debited by the amount in real time. Maybe by cutting out the credit card companies and bypassing the mobile operators NFC will win the hearts and minds of the masses. With all these ups and downs inside in the NFC ‘stratosphere’, there is the clear fact that NFC is still in the bleachers. Retailers need to go ahead and adopt the technology in their stores. Initially for loyalty points for example with dumb stickers like the type in use in Insomnia Coffee stores in Ireland. These have been developed by an Irish company called ZapaTag [24]. A Zapa Tag “is a smart sticker that attaches to your mobile phone”. After this introduction to the public, and once the banks are satisfied that there is a demand for the technology small payments could be introduced using a similar system to a Zapa Tag which is connected to a preloaded account similar to PayPal. The mobile network operators are still trying to figure out how they can make money from including NFC in their offered handsets. Operators are not willing to pay the extra charge to manufacturers for
including this function until they have a concrete business plan. Maybe they need to let the technology take off and then they can identify the areas that have potential to make them money. Along with the operators, banks are also trying to figure out how they can drive revenue from the technology. There are a few trials ongoing with banks [25]. These are basically an NFC Visa styled credit card. This is a start, but the problem with this is that the benefit of NFC has to go further than just contactless payments. We need to do away with these cards and transform them onto our mobile devices. Without doing this NFC domination will inevitably slow down, as customers will end up carrying an NFC credit card and a regular one thereby clogging up their wallet and defeating the real major benefit of NFC – the mobile purse or “wallet”. When it comes to Android and NFC there is still a way to go. There are obviously a multitude of handset manufacturers like HTC, Motorola and Samsung and there are at least two strong chip vendors, Inside Contactless and NXP Semi Conductors. Add to this the three API developers and you have a standardization nightmare. Two of the API developers, Trusted Logic [9] and Stollmann [7] have announced that they are working together to release an ‘open’ NFC platform for Android [26]. This still leaves Inside Contactless working by themselves striving to be the main developer of the API. If these bodies could come together and pool their resources the uptake of NFC and the speed at which apps could be developed, tested and released would be greatly increased. 5
APPLICATION BASE
The main applications being pushed are mobile payment and ticketing, for example Apple’s patented idea for mobile ticketing [17] and [25]. These types of applications are not enticing people, particularly developers to get involved in the creation of original and alternative uses for the technology. The NFC Forum have an annual contest for the most innovative NFC application. The last competition deadline was extended [27] as it is believed that the quality of the entrants was low and/or there was a lack of interest in the competition. Maybe it is the small prize money of €5000 for the winner and two smaller prizes for second and third, €1500 and €1000 respectively. The benefit of this competition is the applications stray away from the standard payments applications for NFC. For example the Pharma Fabula application that identifies medicine for the blind is a very simple and unique app. It is a system whereby NFC tags are attached to medicines [28]. When the blind person swipes their phone over the package, an audio clip plays, telling the user what type of medicine it is. NFC needs these types of ‘thinking outside the box’ applications in order to
exceed. As soon as the iPhone or Android platforms are NFC enabled I can see a huge increase in developer interest in the technology. This will drive creative people to make creative apps. When these apps are available people will avail of these services and NFC will become an everyday technology for millions of people. 6
[4] Tyfone: Side Tap Product specification, http://www.tyfone.com/product-contactlesspayment.html, 2009 [5] Toppan Forms: NFC MicroSD, http://www.toppanforms.com/eng/prod.asp, 2009 [6] Device Fidelity: In 2 Pay MicroSD, http://www.devicefidelity.com, 2009
CONCLUSION
There are four things that need to take place for NFC to succeed: 1) Some organization needs to take the bull by the horns and build an NFC infrastructure, similar to what Spar are doing in the UK. If one company leads others will follow. If Spar can make it quick and easy, while keeping costs down it will work. 2) Costs need to be reduced or kept low for contactless payments. This will take a huge chunk out of the costly credit and debit card charges that merchants have to incur. Hopefully this will do away with signs in retailers telling us “€10 minimum purchase for credit/debit cards”. The potential of quick and easy small payments should encourage people to adopt the technology.
3) Developers need to develop applications outside of the payments/mobile wallet domain in order to excite and entice more interest in NFC.
4) For it to work with Android, a single API needs to be decided upon by the three main developers of these APIs. 7
REFERENCES
[1] Business Daily Africa: Huawei’s low cost Android handset gets launched in Kenya, http://www.gadgetsnreviews.com/huawei %E2%80%99s-low-cost-android-handset-getslaunched-in-kenya/5226.html, 2010 [2] Tomi Ahonen: Almanac 2010 Mobile Telecoms Industry Review, http://www.gadgetsnreviews.com/huawei %E2%80%99s-low-cost-android-handset-getslaunched-in-kenya/5226.html, 2010 [3] Cell Idea: Product specification, http://www.cellidea.com:8080/Virtual_Shop/sdCard.jsp, 2009
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loyalty
cards,
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