NFC….

THE FINAL PUSH

Derek Daly, Sabin Tabirca

University College Cork, Ireland
derekdaly@gmail.com tabirca@cs.ucc.ie

ABSTRACT
Near Field Communications (NFC) has been a ‘buzz’ word since 2003. It is a
contactless technology, enabling quick and secure functionality in numerous areas
including mobile contactless payment, ticketing and data transfer. Everything
about it seems perfect. But why has it been a ‘buzz’ word for so long and not yet a
fully realised technology? This paper aims to answer this question and highlight
the obstacles that the technology has dodged and the hurdles it has yet to leap. This
paper identifies the struggles in trying to develop NFC applications for the
Android platform. It outlines what needs to be done for NFC to succeed, while
concentrating on Android.

Keywords: NFC, hardware, contactless, mobile payments, NFC applications

1 INTRODUCTION but none have their hardware (e.g. Stollmanns

Near Field Communications works within the
range of 10 cm. The range of possible applications
for this technology is huge. Integrating NFC with
Android is an area with huge potential, as the low
cost of Android devices, such as the Huawei Ideos
which at Sh8,000 (€71) is the cheapest smartphone in
Kenya [1]. This factor alone will push Android in
developing markets, where NFC could become a part
of everyday life. According to a recent survey by
Nielson 19pc of smartphone users worldwide have
Android handsets. This number has risen from 8pc
since January 2010 [2]. There is no denying these
figures.
2 HARDWARE
After much research into the different hardware
forms that could manage to be successfully moulded
with an Android phone, an NFC enabled microSD
card was the fore runner. Since mid to the end of last
year three manufacturers [3[4][5] had announced the
release of this technology, and one manufacturer was
only weeks away from doing so [6]. Out of these
manufacturers, Toppan Forms pulled the plug [5].
The problem is NFC enabled microSD cards should
have been commercially available by now.
University College Cork (UCC) contacted the
companies directly (Tyfone, Device Fidelity, and
Cell-Idea) and haven't gotten any real response.
What is the holdup? The reason for this delay, in
Tyfone’s case is funding (which they have received)
and testing which is being undertaken [4]. UCC also
contacted the Android NFC API developers
(Stollmann [7], Inside Contactless [8], Trusted Logic
[9]) for any advice as regards to testing their API's
'Beagle Board' [7]) available quite yet.
Apart from NFC enabled microSD cards the only
real viable option to work with an Android phone is
a powered NFC sticker. These have been
manufactured by a French startup called Twinlinx.
The product is called MyMax [10]. They have
developed the technology, which communicates with
the handset via Bluetooth. The stickers contain a
battery. They cost between $30 and $40. They are
going to be available for testing purposes in October,
and have already been linked up with the French
Cityzi project in Nice [11], where NFC trials are
ongoing. But again this product isn’t available
commercially and it will be next year at the earliest
when it is. It isn’t available for research purposes
either. From a development perspective this option
will be a more complex process than just writing
software to read and write to and from an NFC
device because the sticker communicates with the
phone via Bluetooth. The sticker interacts with an
NFC reader/writer or tag and sends this information
to the phone via Bluetooth and vice versa. They have
a development kit available since June but it’s valued
at €2000 which is way out of my budget (In order to
get this quote you need to contact their sales team).
This SDK includes some form of emulator which
would be ideal for testing apps. With this SDK you
can develop and test NFC apps for the MyMax
sticker, without having the actual sticker.
The fact that three companies have been made their
open source API’s for Android available to
developers [8] [7] [9], shows the huge potential for,
and the interest in the combination of these two
technologies. NFC is all about making life a bit
easier. It’s about enabling quicker payment, and a
more straightforward way of keeping track of items
such as receipts. But these types of applications
aren’t going to push NFC into the mainstream. The
technology needs some excellent uses apart from the
payment, ticketing and access applications that are
being pushed and tested by banks.
3 MAJOR PLAYERS RENEGING
Apart from hardware problems, there has been a
huge amount of reneging on behalf of some key
industry players on the release of NFC products. For
example Nokia’s executive vice president for
markets Anssi Vanjoki announced on the 17th of June
this year [12] that all Nokia smartphones in 2011
would come with NFC. Then five days later they
released a statement saying “We didn’t mean all
smartphones would get NFC” [13]. Nokia is one of
the larger companies that has been backing NFC
since it’s inception and is one of the few
manufacturers to have already released an NFC
phone. They also have had other NFC products such
as the 3220 NFC shell. They are a sponsor member
of the NFC-Forum which is a non-profit organization
promoting the technology. Nokia have been
bouncing in and out of the limelight with their
exploits in NFC. At the start of the year they cut
short production of their long awaited 6216 classic
NFC phone [14]. This was seen as another blow in
the long list of obstacles to widespread NFC use. If
Nokia really wants NFC to succeed, they need to do
more. For instance they should include NFC in all
their phones next year, especially all the Meego and
Symbian ^3 phones they release. Nokia need to have
a unique and powerful selling point if they want to
continue to compete with Android, Blackberry and
iPhone mobile platforms.
Sony Ericsson, like Nokia is a member of the NFC-
Forum and has made some similar claims, which so
far look as if they are going to remain unfulfilled. On
the 29th of June last year Sony Ericsson’s Vice
President of Systems Architecture, Hakan
Djuphammar declared “A year from now basically
every new phone that’s sold will have NFC” [15].
Again it’s August and there is no sign of a new NFC
phone on the market for this year and only rumours
for next year. Sony Ericsson have filed patents for
NFC applications such as the drag and drop function
[16] that allows users whose phones are close to
share files by dragging and dropping them from one
device to another device. This patent was filed in
2007. Three years later and they haven’t included
NFC in their phones.
After a slew of rumours citing that the Apple iPhone
4 would contain an NFC chip, the release in June this
year disappointed. Maybe it was a physical issue
such as not enough space or maybe Steve Jobs didn’t
think the mobile world was ready for NFC. This was
a huge disappointment as for the months leading up
to the release they had patented numerous NFC ideas
including turning the iPhone into an electric point of
sale device, a system for e-tickets for concerts and
events, and also a system turning an iPhone into a
remote control for multiple home appliances [17].
These are just three of the several NFC specific
patents that Apple has announced recently. Mr Jobs
can obviously see the potential of the technology.
Maybe NFC needs an organization like Apple to
make it cool and drive adoption. Unlike Nokia and
Ericsson, Apple really do seem intent on making
NFC a success. The recent appointment of Benjamin
Vigier [18] shows this intent. Mr. Vigier has been
involved with NFC since 2004 as product manager
for mobile payments specialists mFoundry,
specializing in their mobile wallet project. His new
role with Apple is mobile commerce project manager
which more than hints at their focus on NFC.
4 PROGRESSIONS
When it comes to retailers, it’s another story. They
have been slow to adopt the technology because of
fears of larger transaction fees. In [19] out-law.com
cites that retailers believe that banks are going to
make transaction fees for contactless payments
“exorbitant”. This idea has been tossed aside by the
fact that UK supermarket chain Spar has decided to
invest heavily in contactless payment due to low
transactions fees [20]. Spar is setting up NFC
systems in 2600 stores in the UK at a charge of
£700,000. They will save 4c per transaction by not
asking shoppers to enter their PIN. This of course is
excellent for smaller transactions under £15. Spar
believes it can save up to 40% on transaction charges
by using NFC. If the majority of their transactions
were under £15, their contactless transactions would
costs them less than cash transactions, which
currently cost around 2% of the cash to process.
Maybe this fact would push merchants into accepting
the technology. For these contactless payments, the
shopper would be randomly asked for their PIN,
based on their usage patterns for security purposes. It
also creates a more efficient and quicker checkout
than traditional credit card or even cash purchases.
Like Spar, the Co-Operative in the UK is also
starting to introduce contactless payments [21]. 100
of it’s food stores and 50 of its pharmacies are
adopting an NFC infrastructure with the hope of
most of their stores being NFC ready by the 2012
Olympics. This is a move in the right direction and is
an important factor into urging other merchants into
contactless payments.
In a Gartner report [22] on the top ten consumer
mobile applications in 2012 NFC came in a less than
average 7. Two financial transaction functions came
before it. Number 6 is mobile payment particularly in
developing countries, usually done via SMS. The
first on the list is SMS based money transfer, again
mainly in developing markets. It is low cost and
quick, but there are huge problems with security. It is
also very open to fraud like money laundering, two
things that need to be considered when implementing
NFC.
The interest pool in NFC is large. There are retailers,
service providers, customers, mobile operators,
banks, chipset makers, API developers, application
developers, handset makers, trusted service managers
and standardization bodies all vying to get a piece of
the NFC pie. They are all waiting, ready to pounce as
soon as they see the opportunity to make some cash.
This dodging responsibility in order not to fail is the
main hurdle for NFC and is to this day diminishing
the uptake and even knowledge of the technology.
According to a recent survey in June by Datamonitor
[21], out of 1000 consumers surveyed 33% of them
didn’t know what contactless payment was and only
38% said they would be interested in it. NFC needs
one of the interested parties to take the technology
and drive it into the public domain.
PayPal seem to be keen to fill this gap. According to
their boss Scott Thompson, “Mobile wallet solutions
are [their] top priority”[23]. Their focus at the
moment is on moving online payments into the retail
sector. They are developing software enabling
mobile devices, particularly mobile phones to act as
‘mobile wallets’. Their eventual aim is to cut out
middle men, like the credit card companies. They are
trialling the system in Palo Alto California using an
NFC enabled (‘dumb’) sticker which has an id
number which is linked up to your PayPal account.
Your account gets debited by the amount in real
time. Maybe by cutting out the credit card companies
and bypassing the mobile operators NFC will win the
hearts and minds of the masses.
With all these ups and downs inside in the NFC
‘stratosphere’, there is the clear fact that NFC is still
in the bleachers. Retailers need to go ahead and
adopt the technology in their stores. Initially for
loyalty points for example with dumb stickers like
the type in use in Insomnia Coffee stores in Ireland.
These have been developed by an Irish company
called ZapaTag [24]. A Zapa Tag “is a smart sticker
that attaches to your mobile phone”. After this
introduction to the public, and once the banks are
satisfied that there is a demand for the technology
small payments could be introduced using a similar
system to a Zapa Tag which is connected to a pre-
loaded account similar to PayPal.
The mobile network operators are still trying to
figure out how they can make money from including
NFC in their offered handsets. Operators are not
willing to pay the extra charge to manufacturers for
including this function until they have a concrete
business plan. Maybe they need to let the technology
take off and then they can identify the areas that have
potential to make them money. Along with the
operators, banks are also trying to figure out how
they can drive revenue from the technology. There
are a few trials ongoing with banks [25]. These are
basically an NFC Visa styled credit card. This is a
start, but the problem with this is that the benefit of
NFC has to go further than just contactless payments.
We need to do away with these cards and transform
them onto our mobile devices. Without doing this
NFC domination will inevitably slow down, as
customers will end up carrying an NFC credit card
and a regular one thereby clogging up their wallet
and defeating the real major benefit of NFC – the
mobile purse or “wallet”.
When it comes to Android and NFC there is still a
way to go. There are obviously a multitude of
handset manufacturers like HTC, Motorola and
Samsung and there are at least two strong chip
vendors, Inside Contactless and NXP Semi
Conductors. Add to this the three API developers and
you have a standardization nightmare. Two of the
API developers, Trusted Logic [9] and Stollmann [7]
have announced that they are working together to
release an ‘open’ NFC platform for Android [26].
This still leaves Inside Contactless working by
themselves striving to be the main developer of the
API. If these bodies could come together and pool
their resources the uptake of NFC and the speed at
which apps could be developed, tested and released
would be greatly increased.
5 APPLICATION BASE
The main applications being pushed are mobile
payment and ticketing, for example Apple’s patented
idea for mobile ticketing [17] and [25]. These types
of applications are not enticing people, particularly
developers to get involved in the creation of original
and alternative uses for the technology. The NFC
Forum have an annual contest for the most
innovative NFC application. The last competition
deadline was extended [27] as it is believed that the
quality of the entrants was low and/or there was a
lack of interest in the competition. Maybe it is the
small prize money of €5000 for the winner and two
smaller prizes for second and third, €1500 and €1000
respectively. The benefit of this competition is the
applications stray away from the standard payments
applications for NFC. For example the Pharma
Fabula application that identifies medicine for the
blind is a very simple and unique app. It is a system
whereby NFC tags are attached to medicines [28].
When the blind person swipes their phone over the
package, an audio clip plays, telling the user what
type of medicine it is. NFC needs these types of
‘thinking outside the box’ applications in order to
exceed.
As soon as the iPhone or Android platforms are NFC
enabled I can see a huge increase in developer
interest in the technology. This will drive creative
people to make creative apps. When these apps are
available people will avail of these services and NFC
will become an everyday technology for millions of
people.
6 CONCLUSION
There are four things that need to take place for NFC
to succeed:
1) Some organization needs to take the bull by
the horns and build an NFC infrastructure,
similar to what Spar are doing in the UK. If
one company leads others will follow. If
Spar can make it quick and easy, while
keeping costs down it will work.
2) Costs need to be reduced or kept low for
contactless payments. This will take a huge
chunk out of the costly credit and debit card
charges that merchants have to incur.
Hopefully this will do away with signs in
retailers telling us “€10 minimum purchase
for credit/debit cards”. The potential of
quick and easy small payments should
encourage people to adopt the technology.
3) Developers need to develop applications
outside of the payments/mobile wallet
domain in order to excite and entice more
interest in NFC.
4) For it to work with Android, a single API
needs to be decided upon by the three main
developers of these APIs.
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