My friend owns four credit cards. Every time he wants to make a transaction, he has to fish out his wallet, shuffle between cards and make a payment. On top of that, the insecurity that your cards can be cloned anywhere without your knowledge and fear of being duped of your hard earned money always keeps you on the edge. Too slow, too insecure! He lamented one day, while describing how he was at his wits end when he received his credit card bill with myriad of unauthorised purchases listed and realised that he has been bested by a crook. Though the bank did refund the amount into his account, the experience made him generally allergic to credit cards.
I'm sure millions of card users have gone thorough similar scenarios multiple times worldwide. It is quite interesting indeed to witness the demise of such a state-of-the-art technology at the hands of hackers, cloners etc. But is it really worth worrying about? Do we really believe that card payment technology is going to be with us forever? I don’t think so. The card payment technology has been around us for well over 100 years now. It was only time when something was bound to come up making the system redundant.
New revolution?
In the past few years, a new mobile payment technology has been taking shape – thanks to the smartphone war for providing competitive utilities. The emergence of Near Field Communication or NFC as a pivotal technology to enable a safe, secure and viable mobile wallet system is gathering steam now. Since the starting of 2011 itself, there have been multitudes of handset launches from Nokia, Samsung etc, which support NFC. All major handset brands seem to be vouching for NFC, as are financial magnates like MasterCard and Visa. So what NFC is all about and why the handset manufacturers are betting big on it? Let’s take a closer look at the technology.
What is NFC?
Near field Communication is an RFiD based technology first developed by NXP Semiconductors and Sony in 2002. In 2004, Nokia, along with Phillips and Sony, established the NFC forum to work on the technology. Nokia was the first to launch NFC enabled handset, Nokia 6131 in 2006. Since then, NFC was a work in progress until now, when the technology has finally matured enough to be deployed as mass level. NFC is essentially a short-range wireless technology, which typically works at a distance of 10 cm or less. The sensor has a transmitter and receiver inbuilt and it can both receive and transmit data simultaneously. The transmitter generates a RF field, which powers the target and exchanges data securely. The NFC tags, deployed for the purpose may be or may not be self-powered, drawing their energy from the electromagnetic field generated by the smartphone. The NFC tags carry secured data and the transmission between the NFC enabled devices is also encrypted to make the transaction/transfer as secure as possible. The NFC chip, storing your credit/debit card information, can either be incorporated in the handset, SIM or memory card as per user preference.
What it can do?
The NFC has wide ramifications on the way we use our phone. While the NFC Forum is pushing for making it an attractive option for making payments, the NFC can in fact accomplish a lot more. It can be used as passcard for public transportation, as office access cards, hotel room keys or even for your car. Also, being a two-way communication channel, you can also connect two NFC enabled devices and play multiplayer games or transfer data between them. Though, file transfer for now is limited to sending photos, URLs and documents and you'll have to wait some more to send heavier stuff like videos.
Adoption
The year 2012 is set to become a milestone year for NFC adoption. Already, the US market is abuzz with companies getting the infrastructure ready for enabling NFC payments. Companies like Verizon, Google, Paypal and VISA are actively pursuing the payment model and with launch of more NFC enabled handsets, the technology is sure to catch on. A report by Gartner states that already around 141 million people are using mobile banking and the figure is expected to surpass pretty soon. NFC has made its entry in India too with Nokia tying up with Paymate to fecilitate NFC payments. The first destination for NFC would be the Delhi Metro, where the users would be able to make payments by tapping their handset on NFC reciever. Plans are also afoot to automate toll booths, where an NFC tag pasted on the vehicle would automatically make the transaction with the booth. Similar technologies are already being used in Korea and Japan for some time now. So the next time you see someone making payments through NFC, consider it is time to bid farewell to all those cards and jump on to the NFC bandwagon.
List of some NFC enabled handsets:
Motorola L7 (SLVR)
Google Nexus S
Samsung Galaxy Note N7000
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