Contactless Transactions using NFC

Ever heard of buying travel tickets and check-in / check-out by flashing your cell phone? This will be a reality in the next couple of years. The thought excites me – already my cell phone enables me to listen to music, capture pictures, surf the internet over and above making phone calls and now – purchases, check-in/check-out by flashing my phone.  Interesting, isn’t ??

But how will this work? NFC – Near Field Communication will enable us to do that. The beauty of NFC is the simplicity with which it enables communication. This is done by performing a handshake between devices when devices are brought close to each other or through a touch. No complex configurations, no timelags, information can be transferred within milliseconds using either NFC directly or through Bluetooth, Wi-Fi etc.

So what is NFC? It is defined as “a short-range, standards-based wireless connectivity technology, based on RFID technology that uses magnetic field induction to enable communication between electronic devices in close proximity”. For the devices to communicate one of the device should have a NFC reader/writer and the other should have a NFC tag. It operates at 13.56 MHz and transfers data at up to 424 Kbits/second. The transactions are secure since the transmission range is so short.

Mobile manufactures are coming out with NFC enabled phones. NFC will enable phones to connect electronic devices, access digital content or make contactless transactions. Key application areas where NFC can be used are  to get on to transport(bus/rail) by waving your NFC phone, pay for goods by tapping your NFC phone, use NFC phone to enter an arena, pay for parking, read information from smart posters, store personal information on access cards or loyalty information by establishing communication through a touch.

Strategy Analytics forecasts mobile phone based contactless payments will facilitate over $36 billion of worldwide consumer spending by 2011. Pilots of this NFC are being conducted worldwide for purchases, getting directions, exchanging information or buying transportation. To start with, it is expected that this technology will bring in a wave of contactless tickets in transportation segment. Pilots are underway by Transport of London, Ez-link & Starhub in Singapore and RMV Transport in Frankfurt, Germany.

The appeal of NFC based ticketing is it is hassle free. The customer needs to register with the transport provider and install a NFC application. At turnstiles, customer needs to flash phone in front of the NFC readers. Station id is transferred on entry, exit or transit. The tariff engine will determine the fare based on the rules. Fare will either be deducted from NFC e-purse or from bank account. Information on train timetables, routes can be obtained through a tap on NFC enabled posters. For the transport provider, NFC is compatible with the current contactless infrastructure for ticketing and transportation. Roll out of NFC to existing infrastructures is straight forward and doesn’t require much investment!! Pilots are underway wit the most recent in London in conjunction with O2.

Well, we have an innovative technology which has huge potential – the combination of the cell phone and NFC will facilitate deployment of several applications across wide range of vertical markets!!! Wait and watch – in the next couple of years as the benefits of technology are realized, we will see an accelerated adaptation to a point where contactless transactions will become a norm.

Comments

[Sachin Gaikwad]

Nice Information.
Thanks for sharing.

[Msn Murty]

Really, excited after reading. But still got some doubts about this line 'The transactions are secure since the transmission range is so short'
As most of the Phishing Attacks are now happening with in a fraction of second. So are there any industry bodies working on the security implications of NFC.

Kindly post more info on this in future

[Jay Mehta]

Excellent Information.

[Vimal Shah]

its really a great technology for tech people & this issue is really a great one.