I would like to thank the board for making themselves available to participate in this presentation on Near-Field communications as Team Onyx feels there is a time factor involved and the company must act.In this presentation we’ll provide an initial situation analysis of Near-Field communications communications. This will include an overview of the utilization of this technology, current and potential commercial uses, an overview of players in this space from a stakeholder management perspective, current external events shaping the adoption of the technology, technical and security aspects, as well as possible implications for our company.We bring this to your attention in the hopes the board will approve seed funding to allowing us to perform feasibility studies to get a better understanding of the short term and strategic implications of Near-Field communications to our business and our customers.
Near-Field Communications is technology that allows users to transact, exchange, and connect electronically via their smartphone. These exchanges can include everything from purchasing a morning coffee to transmitting healthcare data. Many people use a form of NFC in some way without even knowing it. Many office keycards use a form of NFC, as do some rapid transit tickets, and even some car keys.
It is important to understand that the Near-Field communications protocol is part of a larger field of close-range communication technologies. These other technologies include radio frequency identification (RFID), infrared data association (IrDa), and Bluetooth. Each of these technologies are differentiated based on their usability, range, and uses
There a many possibilities for use the of Near-Field communications in commerce as shown here in this slide. These could includeThe use of e-ticketing for transportation on buses, trains or even flightsProviding one the ability to access and start their automobile with their mobile phoneAllowing an employee to enter and exit securely into offices.Letting people quickly make electronic payments at merchantsAnd giving the people the ability to securely handle banking and other financial transactions
Similar technologies using RFID have been deployed in a commercial context.First Data introduced a touch free payment technology in 2009 when they installed their “Go-Tag” stickers in gas stations such as 7-Eleven. This sticker had a contactless chip that could be included on a customer’s keychain.The Stores utilized Visa Inc.’s payWave application. This technology was not widely accepted because there was not enough buzz for consumers to pick up the cards to use it.
A second example of a close field device in public use is the Ezpass. This tag is an expeditious way for drivers to pay tolls while driving on major toll ways such as the new jersey and Pennsylvania turnpikes.The RFIDDevice is embedded in a tag that a customer can mount to the windshield of their automobile or in a front side front license plate holder. The EZ Pass has been adopted by most of the northeastern corridor with a heavy usage in the New York Metro area, New Jersey, Pennsylvania, DC Metro area, Massachusetts, Delaware, and Connecticut.Applications of the EZ pass have expanded so that customers can pay for parking at major airports such as Newark and JFK.
Another application of RFID in a commercial context is the Mobility Carsharing service in Switzerland and the ZipCar carsharing service in the US. Carsharing is an upcoming alternative to automobile rental and ownership. These services are popping up in major metro areas such as Atlanta, New York, and Boston as a means to decrease the amount of automobiles clogging metropolitan streets. They utilize a Near-Field communications device so that drivers can access cars distributed at car sharing stations. For this service customers reserve time online from their home browser or mobile phone, and the driver accesses and unlocks a shared car by placing their Mobilty or ZipCard when they are authorized to use the car.A similar service and infrastructure for bicycle sharing is in place in Barcelona and in larger cities in Germany and France.
From a stakeholder management perspective, it can be rather difficult to understand the number and role of power players involved in Near-Field communications.
IT’s important to understand the players involved in
These are the financial and merchant services side players in Near-Field communications:Payment Device and technology companies such as Verofone, hypercom, and Adyen create the hardware and software that integrate in point of sale systemsFinancial and Merchant institutions such as Visa, and Citibank allow merchants to create accounts where money is handled and stored.Payment processors ensure transactions for funds transfers are authorized to take place and help move money between financial institutions. And finally indistry groups and consortia such as the
As it is known in a commercial context, the following are the parts of the Near-Field communications Commerce value chainContactless payment readers – which are devices located at the POS that read the mobile device, smart card, sticker, or other instrumentCommunications NetworkNear-Field communications Mobile DevicesProvisioning Service provisioning mobile devices with personal account information, typically provided by the phone service carriersElectronic wallet payment processor providing a user interface on the mobile device and a back-end server-based application which will allow the user to manage their transaction and account, but also handles the actual processing of the payment
Focusing on the technical aspects of Near-Field communications, it is loosely based on the principles of “contactless smart cards.” Smart cards are essentially a memory chip embedded in a card such as a bank card or the sim cards that are used in most mobile phones. With assistance from consortia, the industry is aligning on current and emerging standards. The intent is to leverage existing technologies and infrastructures so that NFC can be quickly deployed in a secure manner.
Since Near-Field communications is essentially a Radio Frequency Identification Device (RFID) using radio waves, there is a reasonable risk for misuse and attacks. Some scenarios include eavesdropping, relaying, cloning, and jamming.EavesdroppingEavesdropping is a situation where the transmission between an Near-Field communications device and the receiver is monitored from a distance or as a person with the Near-Field communications device passes by a malicious party or device (Rotter, 2008). For most passive Near-Field communications devices, special wallets, or bags shielding radio waves are available on the market.Relay/Middle Man AttacksRelay/Middle Man Attacks are when an attacker creates an intermediary connection between the legitimate Near-Field communications device and a legitimate receiver via a malicious device. Countermeasures in this situation include the use of variable, strong public/private key encryption infrastructures where the data collected in the transaction cannot be decrypted or duplicated in a separate time or context and the information passed is useless (Francis, Hancke, Mayes, & Markantonakis, 2010). Cloning/ReplayTag Cloning occurs when a malicious party obtains data through eavesdropping and creates a false signal containing duplicate/falsified information sent maliciously to a receiver for authentication. Countermeasures to this situation may include sophisticated use of multiple IDs and responses between the Near-Field communications device and the receiver (Rotter, 2008).JammingBlocking or jamming occurs when a malicious party simulates the existence of multiple tags causing a denial of service attack on the receiver. Warning functionalities may be employed to detect these attacks so that measures can be taken to detect and eliminate the attack (Rotter, 2008).
The Near-Field communications technology is highly competitive.Most of the top stakeholders have stalled adoption to position themselves as a leader in the market, but this has so far had a null effect.Competing technologies such as the Microsoft tag and Quick Response two dimensional codes are gaining quick adoption in currently deployed devices such as the iPhone, Android, and Blackberry platforms.
AT&T and Verizon have opened their venture to all payment networks, but Sprint is engaging its own networkOn the device end, there’s a battle for the Fight for Verifone/Hypercom US assets between and Ingenico, a Parisian firm and ViVOtech a Santa Clara California startup.
So let’s summarize the situation and conclude what the implications are for our company. Since there are a high number of solution providers in this space,
Since there are a high number of solution providers in this space.
Near Field Communications Technology Overview
Team Onyx 15April 2011
Overview and Purpose Provide an initial situation analysis of NFC Request for seed funding to investigate the cost of integrating Near-Field Communications as a part of Onyx’s commercial structure
Overview Near-Field Communications allows users to transact, exchange, and connect via their smartphone. Used in office security ID cards and car keys.
Similar Devices Comparing NFC to other close range communication technologies (Ortiz, 2008)
Current Uses for SimilarDevicesFirst Data GO-Tag RFID Tag used on a keychain Possible to replace cash and credit cards Used Visa’s payWave application Not enough buzz
Current Uses for SimilarDevicesE-Z Pass Close-Field Device Allows automobiles to pay tolls Works with most interstate toll roads in Northeastern US Some expanded uses allow payment at airport parking lots
Current Uses for SimilarDevicesZip Car (US) and Mobility (CH)Car Sharing Services Automobile sharing services using RFID/NFC card NFC card allows members to access shared rental cars distributed throughout metropolitan areas Similar infrastructure in place for bicycle sharing in Barcelona, Germany, and France
Stakeholder ViewMobile Technology Companies Device Makers Mobile OS Operators Makers
Stakeholder ViewPayment Device and Technology Financial and Merchant Institutions Payment Processors Industry Groups
Market Potential Payments would hit $150 B by 2015 per Frost and Sullivan Gartner projects 340 M mobile users will make $245 BUSD in transactions by 2014 Jupiter Research projected up to 700 million NFC enable mobile phones will be sold by 2013, representing 25% of the market
Technical Aspects NFC is based on combination of “Contactless Smart Cards” and RFID technologies Current emerging standards are ISO 14443 and 18092 Attempt to leverage current infrastructures and standards
Possible Threats, Attacks,and Countermeasures Eavesdropping Relay/Middle Man Attacks Cloning/Replay Jamming
Challenges Highly competitive situation Most key stakeholders are stalling adoption to position themselves to lead the market Competing technologies are on an upswing Various optical bar codes Has limitations as some readers rely on optics
Quick Turning Point in March2011 AT&T and Verizon have opened their venture to all payment networks, but Sprint is engaging its own network Fight for Verifone/Hypercom US assets between Ingenico and ViVOtech Amazon’s announced Android Appstore
Initial Implications High potential for this in a commercial context High number of stakeholders in this space Movement is quick Underlying theme is convergence based on current and emerging technological standards Hope to utilize current e-commerce and pay transaction infrastructure
Initial Implications Will require cross functional involvement from: Marketing and Promotions E-commerce Sourcing Information Technology Telecom Information Security Legal
High Level Plan Mobilize resources Send NDA and RFI to select, key hardware and software players mentioned earlier Evaluate impact to current organizational practices Evaluate interface points and impact to Onyx’s current e-commerce infrastructure Build strategy and business cases to include in current and future budget cycles.
ReferencesNear Field Communications Business Models. (2011). Retrieved March 21, 2011, from Near Field Communications World: http://www.nearfieldcommunicationsworld.com/Nexus - Google. (2011). Retrieved March 28, 2011, from Google: http://www.google.com/nexus/The Guardian. (2011). From moconews.net: http://moconews.net/Balaban, D. (2009, October 26). Large C-Store Chain Goes to Go-Tag Sticker. Retrieved March 11, 2011, from NFC Times: http://www.nfctimes.com/news/large-us-convenience-store-chain-sell-contactless-stickersBensinger, B. (2011, April 5). AT&T, Verizon Wireless to Open Venture to All Payment Networks. Retrieved April 5, 2011, from Bloomberg: http://www.bloomberg.com/news/2011-04-05/at-t-verizon-wireless-to-open-venture-to-all-payment-networks.htmlBenson, C. C. (2010, February 23). NFC vs. Not-NFC, or "Why Put Card Data on the Phone?" A look at Mocapay. Retrieved March 11, 2011, from PaymentsViews: http://paymentsviews.com/2010/02/23/nfc-vs-not-nfc-or-%E2%80%9Cwhy-put-card-data-on-the-phone%E2%80%9D-a- look-at-mocapay/Brown, C. (2011, March 20). NFC will catch on ‘like wildfire’ says Sundance festival game creator. Retrieved April 5, 2011, from Near Field Communications World: http://www.nearfieldcommunicationsworld.com/2011/03/20/36516/nfc-will-catch-on-like-wildfire-says-sundance- festival-game-creator/Elavon, Inc. (2011). About us. Retrieved April 8, 2011, from http://www.elavon.com/acquiring/about/index.aspx: http://www.elavon.com/acquiring/about/index.aspxEurosmart. (2010, December). Figures. Retrieved March 21, 2011, from Eurosmart: http://www.eurosmart.com/index.php/publications/market-overview.htmlEvans, J. (2011, March 18). iPhone 5: Apple, NFC, iTunes payments and you. Retrieved March 29, 2011, from Computer World: http://blogs.computerworld.com/17996/iphone_5_apple_nfc_itunes_payments_and_youFirst Data. (n.d.). Go-Tag. Retrieved April 8, 2011, from 2011: http://www.firstdata.com/gotag/Francis, L., Hancke, G., Mayes, K., & Markantonakis, K. (2010). A Security Framework Model with Communication Protocol Translator Interface for Enhancing NFC Transactions. 2010 Sixth Annual International Conference on Telecommunications (pp. 452-61). IEEE.
References (cont)Grice, E. (2010, March 16). First Data to Deliver Mobile Payments with Tyfones MicroSD-Based Contactless Technology. Retrieved March 11, 2011, from First Data: http://www.firstdata.com/en_us/about-first-data/media/press-releases/03_16_10Haselsteiner, E., & Breitfuß, K. (n.d.). Security in Near Field Communication (NFC): Strengths and Weaknesses. Retrieved March 2011, 15, from Institute for Applied Information Processing and Communications: http://events.iaik.tugraz.at/RFIDSec06/Program/papers/002%20- %20Security%20in%20NFC.pdfKharif, O. (2011, April 1). Ingenico Is Said to Hold Talks to Buy Hypercom’s U.S. Assets. Retrieved April 5, 2011, from Bloomberg: http://www.bloomberg.com/news/2011-03-31/ingenico-is-said-to-be-in-talks-to-buy-hypercom-s-u-s-assets.htmlKharif, O., & Galante, J. (2011, March 31). Amazon Said to Explore Mobile-Payment Service for Handsets. Retrieved April 5, 2011, from Bloomberg: http://www.bloomberg.com/news/2011-03-31/amazon-com-said-to-be-considering-mobile-payment-service-for- smartphones.htmlMcCarthy, B. (2008). Mobile Payment: The Linchpin of the Mobile Commerce Economy. Retrieved March 11, 2011, from First Data:http://www.firstdata.com/downloads/thought-leadership/fd_mobilepayment_whitepaper.pdfMobility Support AG. (2011). This is Mobility. Retrieved April 8, 2011, from Mobility Car Sharing:http://www.mobility.ch/en/pub/how_it_works/this_is_mobility.htmNFC Forum. (2011). NFC Forum: NFC and Interoperability. Retrieved March 18, 2011, from NFC Forum: http://www.nfc- forum.org/aboutnfc/interop/NJ E-ZPass. (n.d.). How It Works. Retrieved April 3, 2011, from NJ E-ZPass: https://www.ezpassnj.com/static/info/howit.shtmlOrtiz, C. E. (2008, June). An Introduction to Near-Field Communication and the Contactless Communication API. Retrieved March 18, 2011, from Oracel Sun Developer Network: http://java.sun.com/developer/technicalArticles/javame/nfc/Rotter, P. (2008, April-June). A Framework for Assessing RFID System Security and Privacy Risks. Pervasive Computing, 70-77.Wolfe, D. (2010, April 5). Starbucks, Target Buck NFC in Mobile Payments. Retrieved April 9, 2011, from American Banker:http://www.americanbanker.com/issues/175_63/starbucks-target-buck-nfc-1016956-1.html?
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