Applying NFC to real world applications

- Jerome Nadel of Sagem Wireless discusses how NFC, Near Field Communications technology can be applied to real applications

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.

The integration of NFC into mobile devices is set to open up new markets for both new types of devices and, significantly, new connected services such as 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.

What is Near Field Communications (NFC)?

NFC is a short-range wireless technology that allows contactless communications to take place between two devices in both directions. Based on Radio Frequency Identification (RFID) technology, NFC can be applied in a number of areas, whether it's paying for goods and services, ticketing or information sharing between devices. The potential services enabled by NFC are making it attractive technology for both businesses and consumers.

While NFC has a slower maximum data transfer rate than Bluetooth, the other major short-range communication technology being integrated into mobile phones, it has a major advantage in both usability and security. NFC enables devices to communicate and exchange data over a small 10cm distance, simplifying tasks such as paying to use public transport by using data stored securely on the device to authenticate and authorise payment without the user needing to take any additional steps such as 'pairing' devices. Furthermore, NFC is compatible with existing RFID structures and not only uses significantly less power than Bluetooth, but can also work when one of the devices is not powered, for example when a mobile device is turned off, in a contactless smart credit card or on a smart poster.

This flexibility and wide application of the technology means NFC has the potential to be integrated to create virtually any kind of connected device. NFC semi-conductor provider INSIDE Contactless is one company at the heart of driving the use of NFC in secure, fast and reliable transactions in payment, access control, transport and electronic identification. INSIDE's solutions can be found in smart cards, key fobs, mobile phones, handheld devices, Point of Sale (POS) and PC peripherals. It is in the mobile phone, however, where NFC will perhaps enter the mainstream of consumer activities.

Challenges for the mass adoption of NFC

Despite there being over four billion mobile phones and one billion smart cards in use worldwide, NFC has still to achieve its full potential of mass market rollout. However, while significant barriers to growth still remain, the mobile industry is working together to address them and move NFC from the pilot stage to full scale commercial roll-outs. Indeed, industry analysts Juniper Research estimate that by 2014, one in every six mobile customers will own an NFC-enabled device, allowing them to conduct small-scale transactions using their mobile phones.

Collaboration between different players from distinct sectors of the mobile ecosystem is required in order to make NFC a part of our everyday lives. Key partnerships need to include mobile operators, device manufacturers, banks, services providers and other trusted third parties. These partnerships are coming to fruition in the form of new NFC devices and services, such as a project with Banka Koper, MasterCard Europe and Mobitel in Slovenia in which subscribers could use contactless payment services using MasterCard PayPass technology, providing a quick, simple and safe way of paying for products and services by a simple tap of a payment device on the payment reader connected to a POS-terminal.

Companies such as Sagem Wireless are committed to playing a lead role in developing new innovative devices that utilise NFC technology in effective applications. For example, Sagem Wireless' new CosyPhone device uses NFC to offer the older market segment of over 50s a simple product which is customised to their specific lifestyle needs. For example, the phone uses NFC to enable simple calling and access to data services by allowing users to wave their Cosyphone past pre-configured and customised shortcut cards to call friends and family, or services such as the doctors or grocery shopping.

Users can also create customised cards for their calendar or diary. A simple wave of the device past the cards send pre-configured text messages, such as wishing relatives happy birthday.

But manufacturers can't drive the mass adoption of NFC without the support of the other key stakeholders in the mobile ecosystem. Mobile network operators are critical for the roll out of NFC because the technology will facilitate the creation of new connected services, and therefore new revenue streams, through the mobile network. The support of mobile operators is required to grow NFC services and drive its take-up amongst end users.

Equally important are banks and credit card companies who need to deliver the required levels of security for simple but effective payment transactions using NFC.

While all this means that there are significant challenges for the mass adoption of NFC in connected devices, 2010 is set to be a crucial year in deciding which mobile network operators, device manufacturers and service providers become the leaders in the field.

NFC is 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:   Some of the most popular examples of NFC applications in mobile devices have initially focussed on contactless ticketing pilots, which have taken place across the world. For end users, the convenience of using their mobile phone to pay for the train or bus fare has proved incredibly popular.
  
  Pilots initiatives in France, Germany and the Netherlands have been successful in showing how NFC enabled mobile devices are an improvement on the existing "smart" card solution already in operation. The NFC system allows users to "touch in" and "touch out" and the start and end of their journey as usual, but also allows them to access additional information and services, such as checking and topping up their balance or monitoring latest travel information.
• Payment:   Users of an NFC enabled mobile device are not necessarily limited to topping up a card. It is possible to add multiple credit and debit cards to the NFC device, enabling the user to use their phone to pay for goods or services at virtually any outlet. Clearly, this scenario of a "virtual wallet" would need retailers such as shops, restaurants and bars, to support NFC with the roll out of new payment hardware, which would need to take place over time. However, global events such as the London Olympics in 2012 are set to kick-start this m-payment with possible plans including having smart tickets for the Games which can double-up as contactless payment and travel cards to create a cashless Olympic Village.
  
  Juniper Research estimates while contactless payments are already established in Asia, by 2014 North America and Western Europe will also see high growth in these services, with the total global mobile payments made via NFC services growing to more than US$110 billion. Successful trials have already taken place in France with Disneyland Paris and in Australia with the operator Telstra.
• Sharing:   Mobile devices are packed with photos, videos, games and other content which we want to share. NFC technology enables a simple process whereby users touch devices to share content such as music, videos and photographs. This has the potential to be driven on all levels of society - from the youth audience sharing videos and music to corporate level data exchanges involving business cards and 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.

NFC 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.

Jerome Nadel is Executive Vice President of Marketing and User Experience, Sagem Wireless and is responsible for bringing innovative user-centric mobile devices to market.

About Sagem Wireless:Sagem Wireless provides customised connected lifestyle devices and services to leading consumer lifestyle brands and mobile network operators worldwide. Using technology innovation and customer insight as strategic tools in the product design process, Sagem Wireless develops a range of connected lifestyle devices personalised to the specific needs of different customer segments. With industry leading technology partners and its own R&D centres based in Europe and Asia, Sagem Wireless offers pre-requisite manufacturing expertise intrinsic to the product design process that relies on both flexibility and the highest level of quality to assure successful entry into new and existing markets. For more information, visit: www.sagemwireless.com.