

2012 Will Be The Year NFC Breaks Big--Just Not In The U.S. - kul
http://www.fastcompany.com/1795224/2012-the-year-nfc-goes-mainstreamoutside-the-us

======
tazzy531
NFC has a huge uphill battle in the US.

It is not for the lack of ideas, nor is it the lack of people trying to build
interesting technology with it. It is because of the carriers.

Yes, the carriers, like Verizon, AT&T, and T-Mobile.

Before I explain why the carriers are the problems, let's step back and talk
about how NFC payment works. On every NFC phone, there is a chip that is
called the secure element. The secure element is the location on your phone
that is separate from the operating system that stores highly encrypted data
that only trusted programs can access. This is the only secure location on
your phone that one can safely and securely store payment credentials. Storing
payment credential on any other part of the phone exposes it to abuse.

On the NFC-enabled phones in your pocket, the carriers have full control of
the secure element. They are actively preventing other companies from using
this to store any information and fully utilizing NFC to their potential as a
digital wallet.

The reason they are doing this is that Verizon, AT&T, and T-Mobile have a
joint venture called Isis
[<http://en.wikipedia.org/wiki/ISIS_(mobile_payment_system)>]. Through this
joint venture, they want to own a piece of the mobile payment market. Anyone
that wants to create a mobile wallet must pay them for the right to do so.
(Notice how the Google Wallet launched on the only carrier that is not part of
the joint venture?)

[see [http://www.nfctimes.com/news/isis-plans-launch-three-
banks-c...](http://www.nfctimes.com/news/isis-plans-launch-three-banks-chase-
capone-likely)] "In addition, Isis plans to charge fees to banks and other
service providers to rent space on their SIM cards or other secure elements in
the NFC phones the carriers sell."

See also: [http://www.nfctimes.com/news/google-nfc-platforms-should-
be-...](http://www.nfctimes.com/news/google-nfc-platforms-should-be-open)
_______________________ "Dickson Chu, Citi’s head of global enterprise
payments for digital networks and mobile, speaking at a conference earlier
this month, reportedly complained that Isis was taking the role of a
“gatekeeper.” Isis would charge fees to banks and other service providers to
rent space on its SIM cards or other secure elements, as many mobile operators
plan to do when they roll out NFC. That’s in addition to charging fees for
delivering coupons or offers. Google plans to charge fees from advertisers for
delivering coupons and other offers but not from payment service providers.

“It's unclear what they (Isis telcos) are trying to achieve, other than
extract a toll as gatekeepers,” Chu reportedly said. “There's so much more
that they could do...as it is they are just hampering the development of NFC
as a mass-market commercial proposition.” _______________________

~~~
blub
Maybe, but NFC can also be used as a communication technology, and there are
no gatekeepers there.

~~~
iloveponies
Except there's less money in it. There is money in payment services and
membership/coupons, however.

------
jhancock
The China gov is working with banks and its social services orgs to integrate
all accounts on a "smart card" that is an NFC connected to your phone SIM.
This works as both a stored value card for things like subway entrance as well
as purchases made for health services by deducting from your health care
account, etc.. The roll out is happening now. I'm not sure when all 260
million cards are scheduled to be out, but a 15 million card rollout is
happening in the next few months.

I am working with one of the companies supplying the cards. They and their
banking partners are highly interested in value added services (better payment
systems, etc) to latch on to this train thats about to leave the station. Feel
free to contact me if you have any ideas ;)

~~~
kul
hey, can you contact me at kul@tagstand.com? be good to talk.

------
sgrove
I was aghast when I read that the Square COO didn't see much value in NFC
(<http://gigaom.com/2011/09/26/square-mobilize-2011/>). After spending a lot
of time in Seoul where it's possible to pay for a ton of stuff via T-money
card (a clipper-card-like NFC card for the public transit system), I hate
pulling out my card to swipe or counting cash.

NFC can phenomenally improve the experience of nearly everything we do right
now, and I expect Tagstand to bring the NFC revolution to the US.

Can't help but be a bit jealous of these guys though, their execution has been
amazing, they seem to be doing everything right! If you're looking to do some
NFC stuff, I'd recommend Tagstand in a heartbeat.

~~~
kul
Thank you.

I think Square are ultimately technology agnostic, but they don't want the
"nfc = payments" meme to spread, not quite sure why. But yes, after travelling
through Asia and seeing nfc payments in action, I totally agree.

The Hong Kong anecdote is true. I was surprised that places wouldn't accept
credit card but would happily accept my transit card for payments. It's a big
opportunity in other emerging markets.

~~~
pyre

      > they don't want the "nfc = payments" meme to spread,
      > not quite sure why
    

Maybe because it takes away from the idea that Square will be able to
dominate? Maybe they see the spread of NFC as a way that the current credit
card companies can jump on the tech bandwagon and edge Square out? Dunno.

~~~
brackin
Square reminds me of the Netbook in 2009. They were very successful in the
short time but they weren't moving forward and everyone knew the tablet would
eventually rule.

NFC will eventually take over and they'll either fade out or have to rethink.

------
thesash
...Unless the next iPhone supports NFC

~~~
rodh257
this is what will actually make it take off I believe. While a subset of
Android devices support it, the marketing push it will receive when Apple
bring it to their devices is what will drive adoption. All the news articles
and other coverage that come when a new iPhone is announced will talk about
how the new iphone is making the wallet obsolete etc, and people will get
their first introduction to the technology.

I was disappointed the 4S didn't support it, as it would have been a good
feature that only the 4S would have.

~~~
blub
Apple will probably be the last to the NFC party. They are (smartly?) letting
the other manufacturers bring the technology to the market.

~~~
jinushaun
I believe the only reason that Apple (and the 4S) doesn't have NFC is that all
the negotiations haven't been worked out yet. The technology is there and
Apple has the know-how to make it a great user experience, but neither Apple
nor Google live in a bubble. They need carrier support for NFC to work.
Otherwise, they won't let NFC phones on their network. And don't forget Visa,
Mastercard, et al. They want in on the action too.

------
JunkDNA
As an average end user, what specific problem is NFC going to solve for me? I
just don't get it.

~~~
l_subbu
When people talk about NFC, most people seem to be talking about only
payments. The article talks about other uses as well for NFC. To me, NFC is a
bridge between the real world and the virtual world. I look at an NFC tag on
an object or a physical entity as really a door that leads to its digital
manifestation in the virtual world. Some things are done better (or can only
be done) in the real world and some are done better in the virtual world. For
example, walking into a store to take a look at the product and try it out for
yourself has to be done in the real world! However, finding out what others
think about it or it's pricing history is better done online. What NFC does is
marry the two worlds seamlessly. Where previously the user had to do this
manually on his phone while at the store, a scan of the NFC tag could readily
bring up all the relevant information. Bar codes and QR codes make this
possible as well - so I cannot quite answer yet why NFC tags would be better
for this. But there are other cases of active-active interactions (as opposed
to active-passive interactions) where a passive bar code or QR code wouldn't
be enough. A good example of this is authenticating someone in person where
authentication relies on both the physical proximity (which is established
with an NFC scan) and a crypto protocol to establish the identity that is best
handled by your mobile device. Mobile payments happens to be one use-case of
the active-active interaction where physical proximity is transformed to an
interaction in the virtual world. Admittedly the biggest use-case though.

~~~
blub
NFC is easier for the customer compared to bar codes. They just have to touch
the tag, whereas with barcodes they have to use a scanning app and so on...

------
iloveponies
NFC will only spread wildly if all handset/OS makers as well as the carriers
open card emulation and the encryption interface necessary to do banking.
Right now, we're stuck in this position where everyone is more than happy to
have all the non-secure critical aspects of NFC (like smart posters) where
there is little market incentive - and control and monopolise purchasing,
coupon offers, membership and loyalty etc etc.

------
icebraining
What's exactly the difference between NFC and RFID? The NFC Forum FAQ isn't
very clear.

Here in Portugal (and AFAIK in multiple European countries) we use contactless
cards for public transportation, but that's about it; payments are still done
with debit cards or cash.

~~~
oconnore
Basically the 'card' is in your phone, which has a battery and a CPU, so it
can secure the communication of your identity which is tied to your bank
information.

The radio frequency is identical.

~~~
icebraining
Yeah, but in the article they talk about the Octopus, which is a real card
instead of a phone, as an NFC device.

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InclinedPlane
Someone isn't paying attention.

A lot of smartphones are acquiring NFC capability (the so-called "android
beam"). One of the most popular new toys this year uses NFC as an integral
feature (Skylanders).

NFC will soon be standard on a lot of phones, and once the installed base
becomes significant then it's only a matter of time before usage becomes
significant as well. Especially when you remember that with smartphones and
tablets there's no need to wait for a substantial build out of expensive fixed
infrastructure.

