Applying NFC in the Real World

APPLYING TO NFC REAL WORLD APPLICATIONS Summary While NFC supports and enables multiple applications on handsets, the first phase of its adoption is already seeing NFC being utilised for payment and ticketing in the transport sector. Pilots and trials have proved successful around the world, and increasingly innovative and compelling services are being designed to exploit the connectivity it enables. With more and more NFC compatible devices being launched by device manufacturers, mobile operators and service providers need to work closely to put in place the infrastructure that will facilitate and drive rollout of the technology.

Against a backdrop of a seemingly unquenchable subscriber thirst for connected services, Near Field Communications (NFC) is opening up new opportunities for service providers, device manufacturers and application developers. Jerome Nadel, EVP The integration of NFC into mobile devices is set to open up new markets for Marketing & User Experience at Sagem both new types of devices and, significantly, new connected services such as Wireless peer-to-peer content sharing, m-payment and m-ticketing and loyalty programmes. With more devices and applications being launched with NFC capabilities, industry analysts are pointing to 2010 as being a breakthrough year for the technology. Jerome Nadel, EVP Marketing and User Experience, and Cyril Caillaud, NFC Product Manager at Sagem Wireless deliver an analysis on the current state Cyril Caillaud, NFC & Androïd Product of the market for NFC technology and applications, and the revenue Manager et Sagem opportunities for the mobile ecosystem in delivering NFC services. Wireless WHAT IS NEAR FIELD COMMUNICATION (NFC)? NFC is a short-range wireless technology steps such as ‘pairing’ devices. that allows contactless communications to Furthermore, NFC is compatible with take place between two devices in both existing RFID structures and not only uses directions. Based on Radio Frequency significantly less power than Bluetooth, but Identification (RFID) technology, NFC can be can also work when one of the devices is applied in a number of areas, whether it’s not powered, for example when a mobile paying for goods and services, ticketing or device is turned off, in a contactless smart information sharing between devices. The credit card or on a smart poster. potential services enabled by NFC are making it attractive technology for both This flexibility and wide application of the businesses and consumers. technology means NFC has the potential to be integrated to create virtually any kind of While NFC has a slower maximum data connected device. NFC semi-conductor transfer rate than Bluetooth, the other provider INSIDE Contactless is one company major short-range communication at the heart of driving the use of NFC in technology being integrated into mobile secure, fast and reliable transactions in phones, it has a major advantage in both payment, access control, transport and usability and security. NFC enables devices electronic identification. INSIDE’s solutions to communicate and exchange data over a can be found in smart cards, key fobs, small 10 cm distance, simplifying tasks such mobile phones, handheld devices, Point of as paying to use public transport by using Sale (POS) and PC peripherals. It is in the data stored securely on the device to mobile phone, however, where NFC will authenticate and authorise payment without perhaps enter the mainstream of consumer the user needing to take any additional activities.

WHAT CHALLENGES EXIST FOR THE MASS ADOPTION OF NFC IN CONNECTED LIFESTYLE? Despite there being over four billion mobile the older market segment of over 50s a phones and one billion smart cards in use simple product which is customised to their worldwide, NFC has still to achieve its full specific lifestyle needs. For example, the potential of mass market rollout. However, phone uses NFC to enable simple calling while significant barriers to growth still and access to data services by allowing remain, the mobile industry is working users to wave their Cosyphone past pre- together to address them and move NFC configured and customised shortcut cards from the pilot stage to full scale commercial to call friends and family, or services such roll-outs. Indeed, industry analysts Juniper as the doctors or grocery shopping. Research estimate that by 2014, one in every six mobile customers will own an Users can also create customised cards for NFC-enabled device, allowing them to their calendar or diary. A simple wave of conduct small-scale transactions using their the device past the cards send pre- mobile phones. configured text messages, such as wishing relatives happy birthday. Collaboration between different players from distinct sectors of the mobile But manufacturers can’t drive the mass ecosystem is required in order to make NFC adoption of NFC without the support of the a part of our everyday lives. Key other key stakeholders in the mobile partnerships need to include mobile ecosystem. Mobile network operators are operators, device manufacturers, banks, critical for the roll out of NFC because the services providers and other trusted third technology will facilitate the creation of parties. These partnerships are coming to new connected services, and therefore new fruition in the form of new NFC devices and revenue streams, through the mobile services, such as a project with Banka network. The support of mobile operators Koper, MasterCard Europe and Mobitel in is required to grow NFC services and drive Slovenia in which subscribers could use its take-up amongst end users. contactless payment services using MasterCard PayPass technology, providing Equally important are banks and credit card a quick, simple and safe way of paying for companies who need to deliver the products and services by a simple tap of a required levels of security for simple but payment device on the payment reader effective payment transactions using NFC. connected to a POS-terminal. While all this means that there are Companies such as Sagem Wireless are significant challenges for the mass adoption committed to playing a lead role in of NFC in connected devices, 2010 is set to developing new innovative devices that be a crucial year in deciding which mobile utilise NFC technology in effective network operators, device manufacturers applications. For example, Sagem Wireless’ and service providers become the leaders new CosyPhone device uses NFC to offer in the field.

How is NFC coming to life? Mobile devices are changing. The growth of the Smartphone has fed a consumer desire for more and more mobile data services. At the same time, monetising mobile usage through new products and services has become a key market driver, and lifestyle brands and mobile operators alike are seeing the revenue potential of creating devices that can drive m- commerce and data usage. They are looking to reclaim their communities from the Smartphone and the generic App Store and deliver and monetise their own branded experience through connected lifestyle devices and services which are personalised to the specific needs of different target communities. NFC is a technology innovation that enables brands and operators to connect with their target communities through these new services. Connected lifestyle devices are integral to every aspect of our lives, and for this reason NFC-enabled mobile devices have the potential to transform the way we pay for goods and services. Ticketing the roll out of new payment hardware, which would need to take place over time. Some of the most popular examples of NFC However, global events such as the London applications in mobile devices have initially Olympics in 2012 are set to kick-start this focussed on contactless ticketing pilots, m-payment with possible plans including which have taken place across the world. having smart tickets for the Games which For end users, the convenience of using can double-up as contactless payment and their mobile phone to pay for the train or travel cards to create a cashless Olympic bus fare has proved incredibly popular. Village. Pilots initiatives in France, Germany and Juniper Research estimates while the Netherlands have been successful in contactless payments are already showing how NFC enabled mobile devices established in Asia, by 2014 North America are an improvement on the existing and Western Europe will also see high “smart” card solution already in operation. growth in these services, with the total The NFC system allows users to “touch in” global mobile payments made via NFC and “touch out” and the start and end of services growing to more than US$110 their journey as usual, but also allows them billion. Successful trials have already taken to access additional information and place in France with Disneyland Paris and services, such as checking and topping up in Austrialia with the operator Telstra. their balance or monitoring latest travel information. Sharing Payment Mobile devices are packed with photos, videos, games and other content which we Users of an NFC enabled mobile device are want to share. NFC technology enables a not necessarily limited to topping up a simple process whereby users touch card. It is possible to add multiple credit devices to share content such as music, and debit cards to the NFC device, enabling videos and photographs. This has the the user to use their phone to pay for potential to be driven on all levels of goods or services at virtually any outlet. society – from the youth audience sharing Clearly, this scenario of a “virtual wallet” videos and music to corporate level data would need retailers such as shops, exchanges involving business cards and restaurants and bars, to support NFC with spreadsheets.

NFC could also be used to transform the advertising and marketing industries by making posters and other promotional materials NFC compatible. End users who see posters advertising products of interest will be able to flash their phone past the advert to download information to their handsets and pass it on to their friends. By sharing information both ways, the marketer can offer users an incentive in exchange for information or interest in a product or service. One example of this interactivity is an exciting collaboration with Centre Pompidou, an art museum in Paris. The project, known at Smart Muse, will use NFC technology to allow visitors to wave Sagem Wireless NFC-enabled mobile phones near exhibits equipped with NFC tags in order to learn more about the artist and the work, watch videos and listen to interviews. Users will also be able to share information and views about the exhibition via social networking sites such as Facebook. The system will be implemented to coincide with the new Teen Gallery’s opening later this year. Meanwhile, Nice in the South of France will be the first city where NFC technology will be widely deployed with an NFC Tour Guide of the old city centre. The Smart Muse project is a consortium of Sagem Wireless, INSIDE Contactless, and CONNECTHINGS, a pioneer in providing tags and contextualized–location- and time- based–content management systems, and is funded with a grant from France’s Ministry of Economy, Industry and Employment. The possibilities for NFC technology are virtually endless. As the infrastructure environment develops, more and more applications will be unveiled as the technology is rolled out. As more people use NFC and it becomes more ubiquitous, so further applications will be generated.

Applying NFC in the Real World

by Isabelle Jourdain on Apr 24, 2010

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Applying NFC in the Real World — Document Transcript

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