Near Field Communication: Smart Phones just got Smarter
By the ITSC Secretariat
A phone is no longer just a communication device. You can catch up with the news, socialise with peers, browse the web, take pictures and also entertain yourself and your friends with thousands of applications. Just when you thought that was it, turns out that smart phones are about to get smarter.
NFC or near field communication is an extension of current Radio Frequency Identification (RFID) standards. By combining the interface of the smart card and reader into a single device, NFC provides data exchange between mobile devices at short-range (a few centimeters). Unlike Bluetooth technology, which can maintain a connection up to 50 metres, there is no need to establish a connection between devices, making NFC a faster and more convenient way to transmit and receive small doses of information.
NFC has opened up many possibilities and will have a large impact on the way we operate. According to Deloitte, shipments of devices equipped with NFC capabilities will likely grow about 100 percent to almost 200 million in 2012, with the figure reaching 300 million NFC smart phones, tablets and other mobile devices sold in 2012. Berg Insight forecasts that by 2017, NFC enabled point of sale terminals will have increased globally from 3.9 million to 43.4 million. Finally, Juniper Research expects the value of NFC-enabled transactions to triple by 2015 to reach $74 billion.
Perhaps the largest potential benefit comes from contactless payments. Imagine buying your groceries and then just tapping your mobile phone to a device at the counter to confirm your payment. The other immediate possibilities that come to mind lie in the transportation, social media and retail information spheres.
In 2009, Singapore became the first country to create a central Trusted Third Party (TTP), consisting of key banks, mobile network operators and transit companies, designed to deliver an integrated, multi-application national NFC ecosystem.
In 2011, the Infocomm Development Authority of Singapore (IDA) awarded a Call-for-Collaboration to a consortium of seven companies - Gemalto Pte Ltd, Citibank Singapore Ltd, DBS Bank Ltd, EZ-Link Pte Ltd, M1 Limited, SingTel Mobile Singapore Pte Ltd and StarHub Mobile Pte Ltd to deploy a nationwide interoperable NFC infrastructure expected to be rolled out in stages in the near future. The project will enable consumers to tap and pay for their purchases at over 20,000 retail points and taxis using their NFC enabled phones, and allow businesses to provide interactive and targeted contents to consumers through NFC-enabled digital signage located at more than 600 locations in major shopping malls and office buildings.
The open access and standards-based TTP model installed through this CFC will encourage growth of the NFC eco-system. Thanks to the ease of integration with a single TTP , new players will be able to enter the market relatively easily rather than having to connect to each mobile operator individually. Banks, payment service providers and businesses will be able to leverage on the TTP to deliver their NFC services to a wide mobile subscriber base.
A lot of the popularity of NFC resides in that it has two advantages over other wireless communications technologies. They are more power efficient, which is a primary concern with technologies implemented to mobile devices, already under scrutiny for their short battery life. And they are also more secure than other wireless communications technologies. Since data communication is only done at close proximity of a few centimeters, it makes it very difficult for a third-party to get in close proximity of the target in order to intercept NFC-data exchanges.
That being said, as with other wireless communications technologies, the threat of the mobile phone being stolen, lost or attacked by malware remains. Users will have to use best practice security measures to protect their information:
Secure your smart phone with a reliable password including not only letters, but symbols as well.
Protect your smart phone with anti-virus software.
Transfer sensitive data via secure channels only. Encrypted information is very difficult to crack, thus the malefactor probably won`t be able to use it.
Remember about the limited range of 6 cm necessary for the data transfer. The malefactor will need to be very close to you, so keep your eyes open.
Expect NFC to spread over to other domains such as advertising, marketing and the creation of smart objects that users can interact with. As NFC goes mainstream over the next few years, don’t be surprised if you find yourself forgetting your wallet at home and not worrying about going back to retrieve it.