NFC Overview Explained

NFC Overview

NFC BOOTCAMP SEATTLE: DAY 1 1

What is NFC?
NFC = Near Field Communications
NFC
• Allows for simplified transactions, data
exchange, and wireless connections
between two devices in close
proximity to each other, usually by no Source: ECMA

more than a few centimeters

• Enabling a new range applications
between consumers and businesses

• Secure enough for banking and
beyond


NFC vs. other Wireless Technologies

Source: NFC Forum


What is NFC? – a closer look
Wireless Communication for consumer devices
• Based on existing 13.56MHz RF technology
• Very short range – “Touch” use scenario
• Data exchange rate up to 848kbit/sec

Wide spread support across technology industry
• NFC Forum founded to drive standards
• Underlying technology well understood
• ECMA340 – operating principle
• ISO/IEC 14443 / ISO/IEC 18092
• NDEF – NFC Data Exchange Format
• NFC Tags (Types 1 – 4)

Has broad use cases for consumers everyday

• Payment • Healthcare
• Transit Tickets • ID Credentials
• Access Control • etc..


Key Milestones for NFC
• 2002 – Sony and Philips Semiconductors co-invent NFC

• 2004 - Near Field Communication (NFC) Forum established by
Nokia, Philips and Sony

• 2006 - Initial specifications for NFC Tags

• 2006 - Specification for "SmartPoster" records

• 2009 - Peer-to-Peer standards to transfer data, etc.

• 2010 – Launch of “N” mark for use in smart posters.
www.nfc-forum.org/N-Mark


NFC Forum
• NFC Forum has 140 members from all areas of NFC ecosystem

“The vision of the NFC Forum is to enable users to access content and
services in an intuitive way, leading to...
o a world of secure universal commerce and connectivity
o in which consumers can access and pay for physical and digital services
o anywhere, at any time, using any device”

Learn more at: www.nfc-forum.org

How does NFC Work?
13.56MHz

Source: Smart Card Alliance Smart_Card_Security_WP_20081013.pdf

• Operates on the same principle as contactless smart
cards and RFID tags (e.g. access control badges)
• A reader initiates an RF communications and captures
data from the card (or programs data into the card)
• With NFC, a phone can be either a reader or a card


NFC has three basic modes
Card Emulation
Mobile payment, Ticketing, Access control
(PC, car, hotel, …), Transit, loyalty card, etc.

Discovery – Read/Write
Get information, point to content
distribution, Smart advertising, capture a
coupon, etc

Peer-to-Peer Communication
Fast, easy device association, setup &
configuration, exchange of business card /
social network profiles, new gaming
experiences … Touch your camera to a printer
NFC BOOTCAMP SEATTLE: DAY 1 to print 8

Mode 1: Card Emulation
• The NFC phone behaves as a
secure card (credential)
o Payment Card
o Loyalty Card
o Access Control Card
o Hotel Room Card

• Leverages security of NFC
o Proximity (user controlled)
o Secure Element (encrypted
data)


Mode 2: Discovery (Reader/Writer )
• The NFC Phone behaves as a card Reader
• Smart Posters/Displays contain NFC tags
• NFC Tag contains URL coded per NFC Forum standard
• Phone automatically jumps to URL
• User is presented with guidance and information
• Implementations include public transit, advertising….


Mode 3: Peer to peer communication
• NFC Phones act as Reader talking to
each other.
• Exchange or share
applications, music, business cards and
services
• Touching the NFC mobile phone to
another NFC device (e.g. PC, DVR)
provides smooth authentication and
transfer of data (e.g. mail, telephone
directory, schedule)


Anatomy of an NFC Smart Phone
NFC phones contain special Phone
Secure
hardware: Processor
Element

• Secure Element
o Stores the encrypted data
NFC
• NFC Controller
o Manages traffic and RF signals
• NFC Antenna
o Collects and transmits the RF signals NFC NFC
Antenna Controller


NFC devices also need Software
• Software developed in “stacks” to support the thee modes
• Stacks are provided by device and chip manufacturers
• User “apps” are written to sit on top of the stacks

NFC BOOTCAMP SEATTLE: DAY 1 Source: NFC Forum 13

What makes NFC Secure?
Send me an
NFC Credit
Encrypted Phone
Card OTA
Data Processor
Provision
Acct Info

Encrypted
Data
NFC
Issuer TSM Carrier

It’s the system!
• Secure Element in the NFC Device – the data “vault” on the phone
• Trusted Services Manager (TSM) – unique entity who knows the keys
• Over the Air (OTA) Provisioning – data packets sent directly to the SE


What is a Secure Element?
• A special chip in your NFC device
that acts as a data vault Examples of Secure Elements

• Securely stores important
information for NFC transactions

• All data is encrypted

• Secure Element Implementations
o Embedded in Mobile Phone
o SIM Card Based
o Removable (SD Card)

• Only accessible if you have “keys”


Critical NFC Terminology

• Secure Element
• NFC Controller
• Contactless Reader
• Discovery
• Card Emulation
• Peer to Peer
• Card Issuer
• Trusted Services Manager (TSM)
• OTA Provisioning


Smartphone penetration growing, many of which will be NFC capable ...
US smartphone penetration
80% 70%
65%
59% Several OEMs launching US NFC
60% 47% phones in 2011
40% 29%
NFC soon to be as common as
18%
20% 12% % of Subscribers bluetooth/cameras

0%
Sources: Nielsen, Mercator, MarketResearch.com, Morgan Stanley, Mercatus
2008 2009 2010 2011 2012 2013 2014 Partners, Mercator, Nilson reports, IDTechEx, Ltd.

Phone models launched with NFC
Nokia 600 Nokia 3220 + NFC Shell Sagem Cosyphone
Nokia 700 Nokia 5140(i) + NFC Shell Google Nexus S
Nokia 701 Samsung SGH-X700 NFC Google Nexus S 4G
Nokia N9 Samsung D500E Samsung Galaxy S II
Nokia C7-00 SAGEM my700X Contactless Samsung Wave 578
Nokia 6216 Classic LG 600V contactless BlackBerry Bold 9900/9930
Nokia 6212 Classic Motorola L7 Turkcell T20
Nokia 6131 NFC BenQ T80 BlackBerry Torch 9810/9860

Source: Wikipedia

NFC BOOTCAMP SEATTLE: DAY 1 ‹#›

NFC leveraging contactless infrastructure
Public
Transport
Mobile phone =
transport card

Payment
Mobile phone =
Credit card
Micro-Payment
Mobile phone = cash

Secure log-in
Mobile phone =
Access Control security token
Mobile phone = key


What’s Next - beyond payments
• Social networking
Sharing contacts, updating social networking
profiles, automated location check-in, advertisement, …
• Computing
Secure automatic log-in, easy pairing of devices, …
• Retail
Mobile wallet -payment, loyalty, advertising, - research
products
• Health Care
Medical records / treatments, dosage tracking/tracing, …
• Government
Driver’s License, benefits cards, Resident/parking permit, .…
• Automotive
Access to services/data, pairing, motor
management, keys, fleet management, driver profile
transfer, …
• Gaming
proximity peer to peer gaming experience, easy pairing, …

NFC EcoSystem

The presentation will cover the following topics – (not in order)

• The Players in the NFC Ecosystem

• The Issuance and Usage Cycle

• The Marketing Elements


The Mobile Payments Landscape

Mobile at the Mobile as the The Mobile Direct Carrier Closed Loop
Point of Sale Point of Sale Payment Billing Mobile
(NFC) Platform Payments
Using mobile Merchants using Catch all Consumers A store builds
devices that are a mobile device category for buying its own wallet
equipped with with an products that ringtones or or platform for
NFC to make attachment to let consumers games or digital mobile
payments at the process credit send money content by payments. It can
point of sale. card payments. to merchants putting the only be used at
or each other. charges on their their store.
cell phone bill.

• Source: mobilepayments.com


The NFC Eco-system development

• Chicken or the Egg?

• NFC Phones or a Place to tap them? Should
we care?

NFC Issuance NFC Usage


Key Players in NFC Issuance

Bank/Issuer Carrier Device/OS Maker

Network Personalizer App Developer Distributor


The Issuer
- Entity that owns the credentials on the
NFC product

- User has a direct relationship with the
issuer through an account

- Issuer can be a Bank, Wireless
Carrier, Wallet Maker, Enterprise, etc.

- Utimate liability for the NFC products
secure functions lies with the issuer


The Carrier
- Normally the wireless carrier or Mobile
Network Operator that provides service to
the user’s mobile device

- Owns the data pipe between the NFC
device and the back end network

- Responsible for the functioning of the
device if its is issued by the Carrier e.g.
Handset

- Provides value added services through
interconnects on its network


The Device/OS Maker
- Adds the NFC function to the user device

- Can be fully integrated – NFC handset, or
semi-integrated – microSD, NFC accessory

- Also covers non handset NFC devices, that
have NFC capabilities –
fobs, appliances, peripherals, etc

- OS maker provides the SW environment
for the NFC capability to function on this
device


The Network
- This is the network on which the secure
credentials flow and get handled

- Usually the payment network in the case
of NFC wallet, but can be expanded to
include enterprise networks and private
label networks

- The network ensures that the credentials
make it from the Carrier to the Issuer and
back


The Personalizer
- The entity entrusted with the task of
adding secure credentials to the NFC
Device

- TSM – Trusted Service Manager. Have a
trusted relationship with the Issuer

- Ensures compliance of the credentials on
the device with the NFC standards

- Can load credentials in a secure facility or
Over The Air (OTA)


The App Developer
- The entity that develops the User Interface
for the NFC function

- Normally tasked by the Issuer or
Device/OS maker to build the app

- App ensures the user can gain useful
interaction from the NFC function – in all
the modes that are supported

- Provides interface to other entities that
need to access the secure credentials on the
NFC function

The Distributor
- Responsible for getting the NFC device to
the consumer

- Can be a retail channel, e-merchant, kitting
service, carrier store, bank
branch, enterprise office, etc.

- First line of support for the NFC function

- Ensures the correct bundling of the various
NFC players before the NFC device gets to
the consumer


NFC Device Form Factor
New NFC on New TSM MNO
Device Device OS/SW Control
Embedded
Device
Required Required Required Required Optional

USIM Based
Required Required Required Required Required

Supports Only in
Not
Existing Accessory Optional Optional
Accessory Required
and New as SE
Based


NFC Embedded Device Issuance


USIM Based NFC Issuance


NFC microSD Issuance


Bank MNO Handset Payment Perso Wallet/OS Retailer
NFC Maker Network Bureau Developer

microSD

MNO Handset Wallet/OS
Maker Developer
Embedded
NFC Secure NFC

Credential
Ownership
MNO

USIM Based
NFC

Key Players in NFC Usage

Merchant Loyalty Offers

Manager/Aggreg Point of Sale Promoter
ator


The Merchant
- Direct beneficiary of any NFC transactions

- Brick and Mortar or Virtual goods
merchant

- Utilize NFC to recreate/enhance the
transactional experience

- New way to interact with the consumer
and draw relevant traffic to the merchant
store


Loyalty Scheme
- Utilize NFC capability to create a
rewarding program for the consumer that
directs traffic to a specific group of
merchants

- As simple as a check-in reward to as
complex as purchase oriented multi-
segment multi-level point/redeem system

- Use physical awareness to reward real-
world and online behavior

- Redemption/addition of rewards at check-
out

Offers/Coupons
- Issued directly by merchant or a 3rd party
intermediary

- Goal is to drive new traffic to the Merchant
using NFC as an enabler

- Create triggers through NFC events – tag
reads, check-out, online behavior, etc.

- Redemption during NFC transaction at
checkout

- Can be promoted through NFC tags

Manager/Aggregator
- 3rd Party assigned the task to collect, store,
manage and integrate NFC based events

- A simple as a coupon aggregator to a full
suite of coupon/loyalty multi-merchant
management platform tied in to secure
credential management system

- Provide analytics on NFC behavior to
drive marketing programs

- Assure compatibility of various NFC
triggers with NFC device

Point of Sale
- Point of interaction between the NFC
device and the Merchant

- Conforms to NFC standards and can
handle multiple NFC device form factors

- Expanded function to tie in to Offers and
Loyalty programs at check out

- Form factor of POS may vary – standard
check out stand at merchant to a hand held
NFC Device


Promoter
- Advertise the various NFC capabilities to
end users to promote usage

- Place NFC tags and NFC triggers in user
accessible locations

- Interacts with Merchant and
Manager/Aggregator

- Ensures wide spread education around the
NFC functionality and its capabilities


Person to Person NFC
- Bypass traditional merchant-consumer
infrastructure

- NFC event triggered between two
consumers

- As simple as an exchange of contact to as
complex as the exchange of funds

- Platform for enhanced social interactions

- Trigger for NFC adoption if interesting use
cases are created using the mobile
application platform.


Key Players in NFC Eco-System
Issuance Usage

Loyalty

Bank/Issuer Distributor
Merchant
Carrier

Offers

Network
Manager/Aggregator

Device /
Personalizer Promoter
App Developer OS Maker

NFC BOOTCAMP SEATTLE: DAY 1 Point of Sale 48

What’s In Your
(NFC) Wallet?
#

The Modern Consumer Wallet/Purse

Receipts

Transit Ticket/Card Access Card

Identification Loyalty Card

Cash Credit Card

Keys?? Store Card

Coupons


My Mobile – My Wallet

One of the fastest growing Don’t leave home without it
technologies in history: > 5B
users 13 minutes average before you
realize loss of mobile

Email/Internet device for over Front of pocket vs. back pocket
500M users
Constant companion for 18-49
segment

Music/Video device for 100’s of High responsiveness to
Millions applications and value added
features beyond voice calls
More than 70% of devices
Screen, keyboard and fast
shipped today have a
speeds for a rich interactive
camera, making it multi- user experience
purpose


Consumer
Preferred
Consumer
Service Provider CONSUMER Preferred
Devices
CENTRIC
Key to A Successful Mobile
Wallet

Consumer Consumer
Trusted Brands Oriented
NFC BOOTCAMP SEATTLE: DAY 1
Applications 52

Timing and Intent
Smartphone Penetration
Currently, smartphones represent 40% of the market; In 2012 it’s
expected to be the majority of handsets.

Consumer Behavior
Mobile payment transactions in the U.S. will reach $56.7B in 2015, up
from the $5.2 billion in in 2009. Combined with a spike in interest for
loyalty and rewards, consumers are ready for the benefits of NFC.

Acceptance
With companies like VeriFone making NFC standard on all future POS
terminals, acceptance is gaining momentum. While not a standard,
merchants and brands are beginning to find the value add in NFC.

Competition
Products such as the Google Wallet, ISIS and the Visa Wallet all provide
healthy competition that will help build the appropriate environment for
NFC BOOTCAMP to flourish. 1
NFC SEATTLE: DAY 53

Smartphone is key to Mobile NFC Wallet Success
• NFC Wallet value can only be derived from a rich user experience
• Open smartphone architectures allow value added applications and
services to seamlessly interact with NFC functions
• Ease of use is key for application success – user behavior has
been set around the ease of use of plastic, and extra complications
won’t be tolerated for similar transactions


Hot Spots Of Interest/Usage of Mobile NFC Wallets


Merchants Accepting NFC

HOUSE &
HOME

$535 GETTING
AROUND
$463
TRAVEL &
LEISURE SHOPPING
$229

HEALTH &
$736
FAMILY

FOOD &
DRINK
$680
$552

Mobile NFC Wallet Issuer - Revenue Sources

Lease Space
• Lease space to other financial credentials
• Lease space to non-financial credentials i.e. access,
transit, security, ID, etc. R
Licensing E
•
•
Value added application interface
Standardized 3rd party app development platform
V
• Richer interface wallets
E
• User Aware
Target Marketing
• Context Aware
N
•
•
Merchant Aware
Location Aware
• Content Aware U
E
Retail
• NFC as a separate component
• NFC as package/product


Own the Mobile NFC Wallet – Own the Revenue

More Usage
Issuer Branded Wallet
Ensures Top of Wallet

More
Customer Acquisition & Loyalty More Users
Revenue
Retains & Builds Customer Relation

Value Added Services More Uses
Monetization Through Additional Revenue Sources


The Mobile NFC Wallet Benefits Everyone
Financial Industry Wireless Industry
•More Transactions = More Revenue •Increased stickiness/loyalty
Speed and
•More Services = More Revenue •New revenue opportunities
•Reduced Fraud Convenience •Wallet provisioning revenue
•Consumer Loyalty •Consumer loyalty

Enhanced
Customizable
Security/Early
Applications
Loss Detect

Consumers User Merchants
•Fast checkout Interaction •More transactions
•Protection from identity theft and •Coupons = More users
•Coupons/awards/receipts = Value •Lower cost of commission/fraud
Connectivity
•Reduced dependence on Cash/ATM •Reduced cash and check handling


Mobile NFC Wallet Distribution

Bank Issued To Over The Air
Customer (Mailed) (AppStore/Market)

Mobile Network
Consumer Retail
Operator Retail (J-
(Brick and Mortar)
hook)


What Does a Mobile NFC Wallet Look Like?


Where else can I use my Mobile NFC Wallet?
TRANSIT HOSPITALITY HOME

CAMPUS ATM


What else can I do with my Mobile NFC Wallet?
INSTANT POS SECURE ONLINE SECURE BANKING
ACCESS

PEER-TO-PEER

BADGE READER TAG READING

Changing Handsets
How does secure personal
Personalization Handset Repair
data move from BB to
Android to iPhone?
How do master keys get
How do you ensure secure
loaded? Does this occur
personal data is not
before manufacturing or
compromised?
after?

Corporate Devices THE CASE FOR A SE Capability
How to distinguish between PLUGGABLE
Who pays for high end SE
secure personal data and
corporate data?
SECURE embedded on mobile device?
CREDENTIAL
SE Corruption Protocols
Who pays to replace handset How do you support
every time SE data is evolving standards for
corrupted? TSM Need interesting niche apps?

What happens if user does
not have connectivity?

The Upcoming Battle of the Mobile Wallets

• 1 device, 1 bank, 1 processor • 14 Banks, 1 Visa Network
• Basic app with offers • Click to Buy feature
integration • Cross channel payments
• Available NOW • Launch in 2012?

• Multi-Bank, Multi-MNO, Multi- • Payments in the cloud
Network • Person to person
• Multi NFC Device form factor architecture
• To launch in mid-2012 • Some NFC

• Non-NFC: Barcode based • NFC on Android and
• Can only be used at iPhone through microSD
Starbucks stores • Prepaid – multi load
• Mobile application based mechanisms
• Available NOW • Available NOW

Not Announced Yet:DAY 1
NFC BOOTCAMP SEATTLE: 65

NFC Wallet Score Sheet
speed
coolness

interactivity potential
portability
security

reliability
complexity
availability
security


NFC is B2C
Brand to Consumer

Presented by Michael J. Manley
Principal, Manley RFID Consulting
www.manleyrfid.com


Concept

Creation

Execution


• Technology climate
o All noise, limited signal
o Pace of innovation
Context
o Mobile strategy
• Fragmented ecosystem
o Chip, Inlay, Label, Software, etc.
o Small companies
o NFC phone penetration
• Think: simple, existing delivery systems
o Product packaging, print media, out of home advertising
o A part of a campaign, not THE campaign
o Peripheral technology

Beyond Payments: NFC is B2CDAY 1

The Brand

Chip Ad Agency
Mfr
Inlay
Mfr Label Publisher
Magazine
Converter
Printer


• Business drivers
o Print media today
o Social media
Concept
o First to market
• Existing capabilities
o In-house – manufacturing
o Post-shipment analytics
o Identified knowledge gaps
• Validate concept
o Customer voice
o Can we do it?
o Budget


• Workshop
o Technology baseline cross-functional team
o Identify areas of risk - mitigate Creation
o Connecting the dots – personal
• Product definition
o NFC chip and antenna size
o Material construction
o Environmental requirements
• Performance
o Manufacturing test
o Mailing test
o Full life cycle


• Challenge
o All options in-play
o Late changes & commits before PO
Execution
o Advertising vs Semiconductor world
• Work-streams
o WS Packaging: Data, encoding, NFC label
o Quad: Test systems
o Quad: Cloud Software
• Oversight
o Consultant
o Quad – many existing process
o Quality focus


The Buzz

Lexus Creates NFC Ad for Wired
Magazine – from lexusenthusiast.com
March 23, 2012

WIRED Delivers First-Ever NFC-Enabled
Advertisement Featuring Lexus – March 20, 2012


• Results – general
o Utilization high
o Measurable brand interaction
Results
o Powerful analytics
o Exceeds, by a large margin, other techniques
• Momentum
o Building
o Key seasonal considerations
o Awareness building re: Olympics


• Value to brand
o Engages customer - directly Learning
o Measurable
o Creates ‘call to action’
o Brand gets information, not Google or Facebook
o Supports Mobile Marketing initiatives
• Value to printer
o Differentiates product offering
o Keeps print relevant in digital age
o New channel for adding value


• Take-away
o Know the ecosystem
o Insulate complexity for your customer Net-Net
o Brand owners are key driver
o NFC is Mobile Marketing enabler
o NFC is not a ‚solution‛
• Interesting recent data JCDecaux Release NFC Trial Results
May 29, 2012
o Outdoor advertising ‚87% of people with NFC-enabled phones are
likely to repeat the experience, while 80% of
o Fun, easy to use, take with non-NFC phone owners said they would like to
use it in the future.‛
o People like it ‚One campaign yielded a redemption factor
of 18%; the average across the trial was still
high at 7%.‛

‚Strong download conversion rates:
including an average of 28% for video
content, rising to a high of 49% when the
content was new and previously unseen.‛

Thank You!


NFC Overview Explained

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (6)

Similar to NFC Overview Explained

Similar to NFC Overview Explained (20)

Recently uploaded

Recently uploaded (20)

NFC Overview Explained