NFC Lets You Leave Your Cash And Credit Cards At Home. Part 2
NFC has many potential uses. However, the primary target application is mobile payments. Instead of using a credit card, customers at stores and other venues will use their NFC-embedded smart phone as the payment device. Users will be able to pay at restaurants, retail stores, parking lots, theaters, sports stadiums, and specialty shops as well as on buses, trains, taxis, and perhaps even airlines worldwide with just a swipe of their phone.
Access is another potential use. People who are authorized to enter secure buildings, facilities, and areas will use their smart phone as an electronic key. NFC also could be used to access homes, car doors, and computers.
Simple data exchange is another possibility. The peer-to-peer mode would allow phones or other devices to exchange data. Business card information could be transferred between phones. Data also could be sent between laptops and printers. Data rates are too slow for video or digital camera data transfers, but the potential will be there as higher rates become available.
Pairing, which is the process of getting two wireless devices talking with each other, is one of the more promising uses. It’s usually necessary in establishing communication in Wi-Fi and Bluetooth systems. By incorporating NFC in these devices with pairing drivers, the connections would take place automatically without user interactions. Nothing is more aggravating that having to pair two radios before use. NFC is a real solution to this maddening problem.
Reading tags or smart stickers is another interesting application. Inexpensive read-only tags can be placed on almost any item so a smart phone can read it. The tags may provide a URL for additional information, or they may store text and graphics for advertising. Promotional posters can provide enhanced data from a tag. Maps could be accessed. Tags on products for sale could provide specifications, features, and price information.
The Mobile Payment Option
The industry seems focused on making NFC the key to “cardless” payments, but it will take more than the seamless wireless link. The credit card companies, banks, cellular carriers, and retailers will have to cooperatively assemble a massive system that will make these payments possible. That system is slowly beginning to emerge.
In fact, there are multiple efforts to build an e-commerce system that all can use. A single standard does not seem possible. The goal is to capture all of those millions and billions of transactions and dollars and get a piece of the action. The current mobile payment effort is all about making money and controlling that flow of funds. Collaboration among players results in new organizations and systems. It appears as though several will coexist in the e-payment realm.
The first major payment system was Google’s Wallet. This cooperative effort between Google, MasterCard, and Citigroup emerged over a year ago, but it hasn’t been widely used. There are more Google Android phones with NFC than any other type of phone, so some activity has occurred.
Another major effort, Isis, is a collaboration of the cellular carriers including AT&T, Verizon, and T-Mobile. Trials are expected to occur in Salt Lake City, Utah, and Austin, Texas, anytime now. The Merchant Customer Exchange amalgamates large retailers like Wal-Mart, Target, 7-Eleven, Best Buy, CVS, Lowe’s, Royal Dutch Shell, Sears, and Sunoco. Other major vendors like Apple, Amazon, and Microsoft have not announced e-payment options.
More than 140 separate e-payment initiatives are in play. Most won’t survive or will operate only in a narrow sphere of influence. The larger efforts will pay off eventually. In addition to garnering a part of the revenue, most of these ventures also want to gather customer data for market research and to further enrich themselves with targeted ads, coupons, and other sales efforts.
The smart card, an alternative to NFC payment, has been around for many years, and its use is continuing to grow. Smart cards have a built-in chip with a processor and read/write interface that interacts with readers at retail and restaurant sites. Contacts on the embedded chip let the reader connect to the card. The smart card is more secure than traditional magnetic strip credit cards.
The major standard for such smart cards is EVM, a joint venture of Europay, MasterCard, and Visa. The organization managing the EVM effort is called EVMCo. American Express, JCB International, MasterCard, and Visa jointly own EVMCo. Most popular credit cards use the EVM standard, which is based on existing ISO/IEC standards 7816 for contact cards and ISO/IEC 14443 for contactless RFID chips.
“Today there are numerous trials on NFC for mobile payment and other mobile commerce activities that are being held by mobile network operators as well as by players like Google, PayPal, and retailers like Starbucks. New players like Target, Wal-Mart, Best Buy, and CVS are also looking to launch NFC payment services,” says Jagdish Rebello, director of consumer and communications at IHS iSuppli.
“These trials are aiming to raise customer awareness for the technology, improve the user interface, and sort out the business model as various nodes in the value chain seek to profit from NFC and develop new offerings that take advantage of the technology. As these issues work themselves out, NFC is well poised to be a key enabling technology in the near future,” Rebello says.
Designing With NFC
Adding NFC to a smart phone, designing an NFC reader terminal, or specifying an NFC tag is a relatively simple process. The biggest challenge lies with the phone designs as the NFC represents one more radio that must added to an already impressive collection of wireless devices typically including several cellular radios, Wi-Fi, Bluetooth, GPS, and even FM in some cases.
Finding the space is the key problem as the low 13.56-MHz frequency requires larger components. The chips are tiny, but the antenna is a printed-circuit board (PCB) loop or an inductor on a ferrite core that must be tuned and matched to the chip. This requires the most space. The extra power consumption may also be a problem in some designs. The design boils down to selecting a chip and squeezing it and the antenna into available space. Large retail reader designs are easier since they offer the most space and can use improved antennas as well as ac supplies.
Multiple vendors offer chips. Most of the larger semiconductor manufacturers have some NFC component including RFID tags. The leader in this space is NXP (formerly Philips Semiconductor, one of the founders of NFC), with an estimated 80% market share.
One of the most widely used NFC devices is the NXP PN65K. This two-chip module includes the NFC transceiver and controller combined with a Secure Smart Card controller for security. The transceiver’s 8051 microcontroller complies with all NFC active and passive modes and standards. The two chips communicate over the S2C or NFC-WI (sired interface) bus.
The PN65K also includes SPI, I2C and UART interfaces. The read/write range can be up to 50 mm with a larger antenna and sufficient power. The Smart Card Controller uses a Public Key Infrastructure (PKI) co-processor and a dual triple DES encryption key coprocessor.
NXP’s PN544 is pin-compatible with the PN65N module but can work with other secure chips. It also supports the NFC-WI wired interface standard ECMA373 for connecting external chips. The NXP PN547, an improved version of the PN544, features a longer read/write range, a smaller footprint, and 50% less power consumption.
Broadcom’s BCM20791 and BCM20792 are made with 40-nm CMOS. These NFC controllers are among the smallest (4 by 4 mm) devices with extremely low power consumption. They’re designed to interface with SIM cards or non-SIM security chips to provide secure transmission. They’re also designed to pair with Broadcom’s BCM4330 Bluetooth, Wi-Fi, and FM combo chip for handsets.
Texas Instruments offers a line of ICs designed for NFC reader terminals. The TRF7970A is an NFC/RFID transceiver IC in a 5- by 5-mm, 32-pin quad flat no-lead (QFN) package. It complies with all NFC standards including NFCIP-1 (ISO/IEC 18092) and NFCIP-2 (IISO/IEC 21481), as well as IDO14443A/B and FeliCa. Designed to work with TI’s MSP430 microcontroller or an ARM MCU, it has programmable output power of 100 mW (20 dBm) and 200 mW (23 dBm). It offers SPI and parallel interfaces and a 128-byte FIFO as well.
The austriamicrosystems AS3911 NFC reader IC conforms to all NFC standards including the EMVCo payment system (Fig. 4). It features a capacitive sensor and requires only 5 µA to wake up in the presence of a tag. The chip also has fully automatic antenna tuning to optimize performance. Its 1-W output power eliminates the need for an external power amplifier. And, it supports the VHBR draft amendment to the 14443 standard, allowing a data rate to 6.8 Mbits/s.
Based on the Microsoft Windows Phone 7 platform, the Nokia Lumina 610 smart phone uses INSIDE Secure’s MicroRead v.3.4 NFC controller and Open NFC protocol stack software (Fig. 5). Also, INSIDE Secure’s SecuRead NFC platform recently went through the EMVCo Platform Security Evaluation Process and is now certified to work with 1.3 billion EMV-compliant cards and tags. It comprises the SLE-97 embedded Secure Element from Infineon, a GlobalPlatform-compliant Java card operation system coupled with the INSIDE MicroRead NFC controller and Open NFC protocol stack.
Meanwhile, INSIDE Secure’s MicroPass 4101-2K NFC tag complies with the NFC Forum’s Type 4 tag requirements with 2 kbytes of memory. This is enough to store long URLs, business cards, phone numbers, or Wi-Fi or Bluetooth pairing information and other application data that can be read by an NFC-enabled device.
Finally, Marvell’s 88W8897 combination chip for smart phones includes NFC in addition to its 802.11ac Wi-Fi as well as Wi-Fi Miracast and location engine (Fig. 6). Other vendors are adding NFC their combo chips too.
Where Is NFC Headed?
The predictions for the use and growth of NFC e-payments are very positive. As the use of smart phones continues to grow and as the incorporation of NFC into these phones increases, the potential for e-payment grows. Today, just over 50% of the U.S. population has a smart phone, but most do not have the NFC component. Apple’s next iPhone is expected to include NFC, though.
According to Jagdish Rebello of IHS iSuppli, only 12% to 15% of current smart phones feature NFC. He indicated that there were 106.471 million devices with NFC in 2011 and 232.507 million projected for 2012. He estimates this will grow to 989.142 million by 2016. More phones with NFC will obviously boost the e-payment movement.
Market research firm Gartner estimates that the value of e-payments will grow from $172 billion in 2012 to $600 billion in 2016. Gartner also expects the number of global users to grow from just over 200 million this year to more than 400 million in 2016.
In its new market reports, Juniper Research projects total mobile payment transactions to hit $1.3 trillion by 2017, mostly thanks to physical goods sales. Yet even then, mobile sales of physical goods would still only account for 4% of all global retail transactions by 2017.
NFC tags and stickers may prove to be very popular. Made of plastic or paper, they include the NFC/RFID chip that will provide some useful text, graphic, ad, map, or URL. As more smart phones get NFC, the use of these stickers will grow. They are cheap enough to be used on a wide range of items or in strategic locations. The sticker movement may be as big if not bigger than the payment function.
There are several reasons why NFC payment rollout is so slow, though. First, there’s a small number of NFC-enabled smart phones. Eventually, though, most smart phones will include an NFC radio. Second, who will enable all those NFC smart phones? Which payment service will consumers select? The public still needs to be educated about NFC. Consumers then must select a service, and selection alone is confusing when so many options are available.
Furthermore, retailer point-of-sale terminals must be upgraded to include NFC readers. It’s an expensive conversion. Who’s going to pay for it?
Finally, NFC e-payment must offer some major benefit. Consumers won’t have to carry as many credit cards, and transactions won’t take as long (see “Credit Cards Aren’t Obsolete Yet”). But is that enough to convince the masses to switch to NFC payments? Many consumers don’t want to include their financial information on their phones, even though NFC is just as safe as their credit cards. In the end, traditional credit cards won’t disappear completely, but e-payments still will account for many transactions.
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