NFC & GOOGLE WALLET

Near Field Communication (NFC) is the next generation short range high frequency wireless technology that works in a range of 10 cm or less (20 cm max. theoretically with compact standard antennas.) NFC is built upon existing RFID (Radio Frequency Identification) standards, by allowing two-way communication between devices in close proximity. Near filed Communication devices operate in 13.56 MHz ISM band and can transfer data at up to 424 Kbits/second. An NFC communication involves an initiator and a target. An RF field is generated between initiator and target, effectively forming an air-core transformer. This RF field can power a passive target which enables NFC targets to take very simple form factors such as tags, stickers, key fobs, or cards that do not require batteries. NFC devices are able to receive and transmit data at the same time. Thus, they can check for potential collisions if the received signal frequency does not match with the transmitted signal's frequency. It allows users to seamlessly share content between digital devices, pay bills wirelessly or even use their cell phone as an electronic travelling ticket on existing contactless infrastructure already in use for public transportation. NFC devices can be used in contactless payment systems, similar to those currently used in credit cards and electronic ticket smartcards, and allow mobile payment to replace or supplement these systems. NFC offers a low-speed connection with extremely simple setup, and could be used to bootstrap more capable wireless connections. It could, for example, replace the pairing step of establishing Bluetooth connections or the configuration of Wi-Fi networks. NFC operates at slower speeds than Bluetooth, but consumes far less power and doesn't require pairing. NFC tags contain data and are typically read-only but may be rewriteable. They can be custom-encoded by their manufacturers or use the specifications provided by the NFC Forum, an industry association charged with promoting the technology and setting key standards. The tags can securely store personal data such as debit and credit card information, loyalty program data, PINs and networking contacts, among other information. NFC is an open platform technology standardized in ECMA-340 and ISO/IEC 18092. According to analyst firm Berg Insight, global sales of handsets featuring Near Field Communication (NFC) increased ten-fold in 2011 to 30 million units. Nokia, Sony, and Philips founded the NFC Forum in 2004 in order to promote the short-range wireless connectivity technology. Samsung, Motorola, Microsoft and more than 140 other organizations all joined the party shortly after. NFC is standardized in ECMA-340 and ISO/IEC 18092. Here are the six ways where NFC could have most impact: Contactless Payment: NFC has a short range of about 1.5 inches. This makes it a good choice for secure transactions, such as contactless credit card payments. MasterCard and Visa are both members of the NFC Forum, and both companies have been involved in pilot programs that use NFCenabled phones as a flash payment option. Phones could tap and go using infrastructure already in place for credit card systems

Transportation: NFC works with most contactless smart cards and readers, meaning it could easily be integrated into the public transit payment systems in cities that already use a smart card swipe. Health Care: Not only can NFC tags provide medical professionals with information about what treatments a patient should receive, but they can also keep track of when nurses and doctors have checked in with that patient and when. Ease of Use: If NFC-enabled phones become prevalent, youll likely be able to initiate a two-player game by touching your phones together. Youll be able to link a headset to your phone or print a photo just by touching your device to a printer. Smart Objects: An NFC tag often contains information like a phone number or URL. It can be used at bus stops, the theatre, a restaurant, and a pub with a mobile phone. Social Media: like on Facebook, Follow on Twitter via NFC smart stickers in retail

Google Wallet is a mobile payment system developed by Google that allows its users to store credit cards, loyalty cards, and gift cards among other things, as well as redeeming sales promotions on their mobile phone. Google Wallet uses NFC to make secure payments fast and convenient by simply tapping the phone on any PayPass-enabled terminal at checkout. Google plans to produce NFC stickers associated with one credit card each, to be affixed to non-NFC-capable phones. Currently, Google Wallet supports only two kinds of credit cards: most Citi PayPass eligible MasterCard credit cards and the Google Prepaid Card. Google wallet is yet to take off the way it should have, primary reason being that NFC requires a broad ecosystem to get it off the ground. The second big problem is that there are still business issues centering around who controls the customer via the NFC technology that's embedded in the device. It's this uncertainty around NFC that has caused other companies looking to break into the mobile payment to put NFC-based solutions on the back burner. For example, MasterCard, which is Google's partner on Google Wallet, did not include NFC in its own recently announced digital wallet. Google doesn't currently charge users or merchants for access to Wallet, and plans to make money by offering sponsored ads to their users. The new app Google Shopper will push two types of offers to a user's phone: a) Today's offers, which allows the user to see a single offer redeemable for discounted goods or services in their area. b) Nearby offers, which allows the user to see a list of offers in the 'Eat' and 'Play' categories that nearby businesses have submitted through Google Places. Google Wallet will be collecting massive amounts of data on consuming habits a model of success patterned after their free internet based products like Gmail, Google search, etc. Thus new revenue comes from two vulnerable industries: advertising and loyalty.

Submitted by: Vineet Chachra, Systems & Finance 2012-14