Where next for NFC?
Where next for NFC?
Near Field Communications (NFC) is the basis for much more than a mobile wallet. There are many potential applications for it, many of which we looked at in a recent Orange Business Live post (http://blogs.orange-business.com/live/2011/10/five-ways-nfc-may-change-y...). Digging a little deeper, Real Times talked to Yves Laurin, sales director for Orange's integration arm, IT&L@bs in Canada, about some of those opportunities and rival technologies.
Q: Yves, looking beyond contactless payment, give me an example of an application that could utilize NFC?
A: France Telecom has been developing an NFC-based system which lets you open your car door with a mobile phone. What this means for a company running a fleet of 15 vehicles, for instance, is that rather than having a traditional key and it getting lost or left in someone's pocket, you could deploy an app to staff smartphones, which they can use to run the car. If an employee leaves the company, you will be able to shut down access - to the car or your office - for that employee from directly within the online management system. All the access rights would be managed over the air.
Q: what about NFC and retail?
A: We have looked at applications around digital signage. You're walking down a streets, you see an advertisement that interests you, so you swipe your phone over the ad and it sends more information or maybe a voucher to your phone. This would also work in store. The advantages are that retailers can easily change promotions and product information: it is easy to use, easy to manage, and it makes it quicker to turn around your promotional programs.
Q: and presumably you would then be able to use your phone to pay for the item when you have found out more information about it?
A: That's the aim. The big credit card firms - Visa and Mastercard - are already working with NFC, but they are focused on terminals and some trials are taking place.
Q: some say Bluetooth 4 could be a potential threat to NFC?
A: It could, but it's about regulation. If you look at NFC it is a standard, not just a communications protocol. The standard says communications have to be at a 4cm radius, for example. At present, Bluetooth is a communication protocol, and while this can be applied in a manner which supports payments, that's only part of what's needed. You'd also need a payment-supporting standard, this would certainly be required, by the credit card companies.
Q: is this because of the need for security protection?
A: Yes. If I do a transaction using Bluetooth and there's fraud I will not be protected, because it does not follow any form of financially recognised standard. What I mean is that if Bluetooth does come around it will still need to comply with a security standard, so credit card companies, merchants, vendors, banks, business and users will all be protected against fraud.
Q: NFC hasn't reached the high street yet. Why is this?
A: The technology is great for transactions, but when it comes to small high street retailers what's to convince them to invest in the equipment? What this means is that when you go out shopping and want to use your mobile wallet, many smaller retailers won't have the payment-taking terminals. You'd find larger retailers would support it, but not the smaller ones. That's a big problem because it means you'd still be using two payment systems. For the smaller retailers it's about cost - in a wonderful world in which it cost $5, for example, to integrate NFC systems, it would be a lot easier for everyone to migrate from one technology to another. That's because deploying NFC payment-taking systems would be affordable for smaller retailers to set-up.
Q: what about using smartphones as payment terminals, not just wallets?
A: There are many companies looking at that model, but inside the small stores: they aren't convinced they need these systems, aren't certain if the investment would build business or justify deployment costs. As they see it, if you have the legacy point of sales unit on your desk and you can run the transaction from that - it is less risky than trusting employees with smartphones.
Q: what advantages are there for larger retailers?
A: A large retailer will migrate to NFC because it offers business efficiencies. For example, shoppers and staff can move around the shop and pay as they go; there are no queues, and it also makes the person manning the point of sale more productive, because they aren't tied to a cash till but can be out on the floor, helping customers, and taking payments with their portable NFC device.
Q: it appears NFC deployment is ramping-up fast, what are you seeing?
A: There are a couple of smartphone manufacturers including NFC inside their devices. I think that within the next two years practically every smartphone will boast NFC support. Where we are right now, Asia and Europe have been much faster than other regions to begin migrating to NFC, but within a year I think it will be deployed in every region.
IT&L@bs Canada is a division of Orange Business Services. Experts in real-time innovative technology, it specializes in Critical Software, M2M, RFID, Smart Card and IT Security. It provides services through research and development, consultancy and integration mandates. For more details please visit: http://www.itlabs.en.orange-business.com/687-canada.htm.