While smart card manufacturers where showcasing their latest visual tricks and printing capabilities on the busy alleys of CARTES & Identification in Paris, most applications were geared as usual towards enforcing increased security and authentication, whether it be for access control or payment solutions.
Near field communications (NFC) was definitely in the spotlight, technically there, but still far away from mass deployment.
What mainly distinguishes NFC devices from contact-less smart cards of the ISO/IEC 14443 type is their ability to operate in three modes, not only like existing contact-less cards (in emulation mode), but also in a reader mode and in a peer-to-peer (P2P) mode.
As a reader, the NFC device is active and can read a passive RFID tag (operating at 13.56MHz) that would be embedded in a poster or it could even read another contact-less smart card to allow a transaction.
In the P2P mode, two NFC devices can exchange information, to initiate a higher speed communication interface such as Bluetooth or Wifi for example.
In reader or P2P modes, the NFC chips usually rely on their host's power supply, so any NFC-enabled mobile phone has the potential to extend existing contact-less infrastructures, sometimes turning into a subscription-based electronic ticketing solution for public transports, or supporting mobile payment in retail shops.
This is all nice and convenient in theory but even though the technology has been around for a few years now, NFC hasn't taken off as fast as once expected by silicon vendors.
The roadblock seems to be the lack of a business model to please all main market players; namely mobile network operators, banks, and service providers (retailers, transporters).
Mobile network operators, who typically own the subscriber identity module (SIM) would favour all the NFC transactions to be secured onto their SIM. Mobile manufacturers and chip vendors wouldn't mind having the secure transactions taking place on the device's baseband processor chip, while banks and service providers are not too happy about the idea of being left behind, only renting out memory space and processing power to run their secure applications on either silicon.
The GSM Association (www.gsmworld.com), the NFC Forum (www.nfc-forum.org), Nokia (www.nokia.com) and Global Platform (www.globalplatform.org) all have issued several whitepapers on NFC, to no avail.
What' s more, silicon vendors remain cautious about how much memory they should build on the NFC chips, as the memory needed will largely depend on how NFC will be integrated in the handsets and how the applications will be configured. All the uncertainties around its real-world implementation make it difficult to ramp up production altogether.
Yet a recent forecast from Juniper Research expects NFC to thrive as a mobile retail marketing tool, via coupons and smart posters. It will support the growth of NFC mobile payment transaction values from $8bn in 2009 to exceed $30bn within three years according to the market research firm, with the market ramping up from 2011.
In a separate market analysis, the company found out that UK brands already benefit from a six-fold increase in response rates through mobile coupons compared to traditional paper coupons. Smart posters are also likely to be popular amongst the 16 to 34 age groups, reports the author Howard Wilcox, redeeming coupons and product samples from a simple tap of the phone.
