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Near Field Communication (NFC)for Mobile Applications in AsiaJoseph WeiFounder, Silicon Valley NFC MeetupMember of the Berani GroupVice Chair & Program Chair IEEE Consumer Electronics, SCVCo-chair, SVC Wireless, Entrepreneur SIGJosephWei@Beranigroup.comTwitter: @josephwei11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)1
NFC - Bridging the Physical andthe Virtual Worlds11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)2
Agenda NFC History, evolution, and key playersNFC technologiesNFC ApplicationsNFC in AsiaMyths, Hypes and FactsResources for NFCQ&A11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)3
NFC Evolution 2002200320042005200620072009201020112007-2010 Technology specificationdevelopments2007 GSMAbodyendorsement2004 NFCForum formedPrior to 2003:R&D byINSIDESecure, Nokia, 2003 - NFC becomes approved ISO /Sony & PhilipsIEC Standard20082006- Present Increasing NFC ecosystem2010-2011 Mass rolloutannouncementsThe NFC Forum 11/10/2011KeyMembers Established in 2004Currently has 140 members acrossthe NFC ecosystemEncourages and promotesdevelopment of products using NFCForum specificationsDevelops standards-based NFCspecifications and interoperabilityparametersNFC for Mobile Apps in Asia (Stanford EE402A)4
History of Mobile CommerceIn 1997, first two mobile phone enabled CocaCola vending machines were installed inFinland. Payment was made by SMS textmessage11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)5
Wireless Technologies11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)6
NFC SpecificationsWireless Short Range CommunicationTechnology– Based on RFID technology operates at 13.56 MHz– Operating distance typical up to 10 cm– Data exchange rate of 106, 212, 424 or 848 kbit/s– ISO/IEC 18092 for Interface and Protocol– ISO 14443-A and 14443-B for transit and proximity– ISO 15693 for extending the distance of ISO 1444311/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)7
NFC: Three Modes of Operation11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)88
NFC CommunicationsPassive Communication Mode:– The Initiator device provides a carrier field and the target deviceanswers by modulating the existing field. In this mode, the Targetdevice may draw its operating power from the Initiator-providedelectromagnetic field, thus making the Target device a transponder.POS as the Initiator11/10/2011NFC phone as the InitiatorNFC for Mobile Apps in Asia (Stanford EE402A)9
NFC CommunicationsActive Communication Mode:– Both Initiator and Target device communicate by alternatelygenerating their own fields. A device deactivates its RF fieldwhile it is waiting for data. In this mode, both devices typicallyhave power supplies.11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)10
NFC TagThe NFC tag is a thin simple device containing antenna and smallamount of memory. It is a passive device, powered by magneticfield generated by the reader device. Depending on the tag typethe memory can be read only, re-writable, and writable once11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)11
NFC Architecture & Secure Element NFC Chip for basic NFCcommunications Secure Element (SE)– Secure storage to provide a standardand secure environment to managemultiple applications in a multipletenants environment– Special hardware for randomnumbers generation of keys– SE can be accessed throughBaseband Controller (internal) andRF Field (external)11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)12
Implementation of SE SIM Card– Issuer: MNOs– SIM is more flexible as no “Card-Slot” is needed– “NFC” SIMs can be used in regular (non-smartphones) phones Secure Memory Cards– Issuer: Banks for mobile payment– Micro SD Card Slot Required Integrated in Handset––––Issuer: ?Handset belongs to consumerSmartCard Chip always in HandsetWill evolve to multiple SEs11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)13
Many Mobile Applications with NFC11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)14
We may already have contactlesspayment cards that we don’t knowLook for the symbol on the front orback of your cards11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)15
American Express Expresspay AntennaNFC chip11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)16
Discover Zip On the back of the card11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)17
Mastercard Paypass Smart ChipContactlessGoogle Wallet with Citi l#/home/http://www.youtube.com/watch?v DsaJMhcLm A11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)18
VISA payWave 11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)19
Excitement in NFC and MobileCommerce11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)20
High Growth in Mobile Commerce11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)21
Retail 2.0 is already on the way 90% of the overall installed handset base will besmartphones by 2014* 70% of shoppers use smartphone while shopping instore** 74% of smartphone shoppers made a purchase as aresult of using smartphone** The smartphone is becoming the platform for shoppingexperience AND a unique opportunity for retailers toengage with customers in the store*A New Age of Mobile Services, Gartner Inc., (Oct. 29, 2010)** The mobile movement study (April 2011)11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)22
Transitioning from paper todigital format 99% of papercoupons neverredeemed Digital distributionof free and prepaidoffers 10% gift carddollars never spent Digital couponshave 10-20%redemption rates Location-basedloyalty services Loyalty cardsunderutilized11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)23
Google Wallet ExperienceSEARCHDiscover offers online or inapp, and save11/10/2011PAYTap to pay and redeemoffer at POSSAVEManage and redeem offers,gift cards and loyaltyNFC for Mobile Apps in Asia (Stanford EE402A)242
Sample of new NFC applicationsM to MSingle TopLocation BasedCounterfeitdetection offood, drugs,consumer goodsPeer 2 PeerSocialNetworkingRoom key forhome, officeand hotels11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)CreativeGaming UseCases25
Mobile Commerce in Asia11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)26
Mobile Commerce in China In 2005, TOM partnered with Union Mobile Play, the soleauthorized mobile payment gateway in China, to develop bank card,debit card and credit card mobile payment. Customer pay viamobile phone bill even plane tickets. In 2007 China Unicom and Smartpay Jieyin launched “China UnicomMobile Wallet” on utility bill, insurance, lottery ticket. China’s m-commerce reached RMB 1.3 Billion (US 163 Million) in2006. Forecast to reach RMB 7.6 Billion (US 953 Million) by 2010. Since it was founded in 2002, UnionPay has issued more than 2.38billion bank cards through its members. Total transaction amount switched by UnionPay network in 2010exceeded RMB11,200 billion, a year-on-year growth of 46%. Today,all bankcard issuers in China are members of UnionPay andUnionPay cards are accepted in 104 countries and regions.11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)27
Jiepiang in ChinaJiepang, similar to Foursquare, is partnering with3,000 stores in six cities to roll out NFC payment togive offers after customers “check in”.11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)28
JC Decaux Smart Posters in Australiahttp://www.youtube.com/watch?v SVtnxaPbtjE11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)29
Virtual Grocery Shopping in KoreaSubway Stationhttp://www.youtube.com/watch?v fGaVFRzTTP411/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)30
Japan’s Suica for Transit and mobilepayment11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)31
Myths, Hypes and Facts11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)32
Myth #1 - NFC phones are not secure formobile payment NFC phones with Secure Element offer muchmore security with pin, tokens etc., as comparedto magnetic stripe or contactless credit cards NFC antenna is turned off when the phone is notin the “active” mode, so, info cannot be easilysniffed Contactless transit cards are based on NFCtechnologies and have been in used for manyyears without major security issues11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)33
Myth #2 - Not enough POS terminals Over 1 million contactless POS terminals willbe installed in 2011 globally* 15% of top 150 US Merchants are equippedwith Contactless POS terminals* Visa and Mastercard have issued statement toshift card fraud risks to the merchants who donot upgrade their POS by Oct. 2015 By 2016, 85% of POS terminals will supportcontactless payment**11/10/2011* Source: Vivotech, Apr. 2011** Source: ABI Research, Aug. 2011NFC for Mobile Apps in Asia (Stanford EE402A)34
Myths #3 - Not enough NFC phones Less than 40 million NFC handsets in 2011* Smartphones are expected to represent 44%of all mobile handset shipments by 2014** 31% of all mobile phones or 580 million NFChandsets in 2015*** 630 million handsets, representing 40% of allmobile phones shipped, will come with NFC in*NFC Times2015****** Gartner11/10/2011*** iSupply Aug. 2011**** Informa Telecoms & MediaNFC for Mobile Apps in Asia (Stanford EE402A)35
Hypes – explosive growth in NFCphones Initial forecast of 90 million smartphones in 2011with NFC is now reduced to around 40 millionunits Rumors of Apple iPhone 5 with NFC which turnedout to be iPhone 4S with no NFC Many other choices for mobile payment thatdon’t need NFC phones– M-Pesa in Kenya is based on SMS– 90 % of residents of Hong Kong uses Octopuscontactless cards for transit and paymentsdaily***Source: iSupply Aug. 201111/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)36
Fact #1 – Large number of NFC patents11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)37
Fact #3 - NFC will be in many devices11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)38
Fact #4 – Growing number of placessupporting NFC Payment11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)39
NFC forum.orghttp://en.wikipedia.org/wiki/Near field communication11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)40
Q&A11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)41
ISIS Mobile Wallet promohttp://www.youtube.com/watch?v 7EIyAolD2JE11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)42
Tappats NFC for Stanford Bushttp://www.youtube.com/watch?v WDsJ5594hq811/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)43
Thank you11/10/2011NFC for Mobile Apps in Asia (Stanford EE402A)44
11/10/2011 NFC for Mobile Apps in Asia (Stanford EE402A) 22 Retail 2.0 is already on the way 90% of the overall installed handset base will be smartphones by 2014* 70% of shoppers use smartphone while shopping in-store** 74% of smartphone shoppers made a purchase as a result of using smartphone**
