NFC Mobile Payment Trend

After ApplePay’s deployment in October 2015, NFC mobile payment adoption is taking off in the USA. I am curious about how people perceive this technology (NFC) and its application (ApplePay & mobile payment). Therefore I did a Google Trends comparison between Mobile Payment, NFC and ApplePay today. To my surprise, the trend indicates there has been an increase in people searching NFC comparing to searching “mobile payment” and “ApplePay” (see attachment below).

Asia seems to be the continent that is more into the technology. The interested regions are as follows:

Google Wallet, the first NFC mobile payment app, was released in 2012. There is no surprised that such an innovation came from a company that embraces creativity. Shortly after, to Google’s surprise, the telecoms, who were developing their own NFC-based mobile payment app, blocked Google Wallet. This challenge forced Google to look into an alternative way to implement NFC mobile payment. Thus, the HCE (Host Card Emulation) approach was created in order to bypass telecom’s control on Secure Element.

Softcard (formally, ISIS), a joint venture between AT&T, Verizon and TMobile started a trial in late 2013 and was launched in 2014. To promote and educate people on the NFC mobile payment technology, one million complimentary Jamba Juices were given away to Softcard users. Despite these efforts, the adoption rate of Softcard was not good enough to sustain the business; especially facing competition with ApplePay and its trademark simple user experience.

Last month, Softcard was bought by Google. I wonder what the agreement is between Google and telecoms? Will this be another walled garden business model? Is the NFC mobile payment market a war between Apple and Google now?

It’s interesting to watch the evolution of these NFC applications; especially in the mobile payment market. Various challenges continue to stimulate more innovations. After all, a vision has to be either supported by a market demand or inspiring enough to create a new market entirely.

About the Author:

Hsuan-hua Chang has over 20 years of experience in wireless technology, holding many corporate positions ranging from software engineer, technical architect to product marketing manager. She is the author of “Everyday NFC Second Edition: Near Field Communication Explained”

ISIS Mobile Wallet / Google Wallet / iPhone Mobile Payment

Yesterday when I was checking out at the Wholefood Market, I was delightfully surprised by their new NFC-enabled reader. At the top of the screen, it said “Swipe/Tap Your Card/Phone”. According to the excited cashier, I was the first one using my phone to pay.

ISIS Mobile Wallet has been available since November 2013. Jamba Juice was chosen as the main promotion partner; a free drink for payment made with ISIS. Jamba Juice was committed to give away one million drinks. For a while, I was having Jamba Juice every day. What a treat!

James D. White, chairman, president and CEO of Jamba Inc., in a company press release, said “Facilitating 1 million transactions through the mobile wallet over the last seven months confirms that the era mobile commerce has arrived. I am proud that Jamba has been able to serve as a leader in the space”.

I appreciate their leadership for this emerging technology.

There are many discussions about Apple’s potential mobile payment and the possibility of an NFC-enabled iPhone 6. I think it might be helpful to describe two approaches to implement an NFC mobile payment. If you want more technical information, please check out the details in this Android page.

I. SIM based Secure Element (SE):

In order to be able to use ISIS mobile payment, you need to get an ISIS SIM card from your service provider. The SIM card includes a Secure Element (SE) that contains your credentials.

When an NFC Reader is tapped by an NFC device, the NFC Controller routes traffic to the SE for authentication.

This approach is very secure because it is difficult to hack the SIM card.

II. Hosted Card Emulation (HCE):

When you use Google Wallet, you don’t need a specific mobile payment SIM. Google wallet uses HCE.

The NFC card is emulated using HCE. When an NFC Reader is tapped by a device, the data is routed to the host CPU. This approach uses the credentials that are stored in a remote server for authentication.

HCE is considered to be a threat to the SIM-based SE and is adopted in various NFC secure applications.

Now the questions is “When iPhone adopts NFC, which mobile payment approach will it choose?

Source of pictures: developer.andriod.comhttps://developer.android.com/guide/topics/connectivity/nfc/hce.html

HCE is Here to Stay

SIMalliance published a whitepaper last month entitled “Secure Element Deployment & Host Card Emulation”. It stated that, “SIMalliance contends that while HCE is good for the NFC ecosystem as a whole, the technology remains immature, unstandardized and, relative to SE-based deployment, vulnerable to malicious attack.”

In general, an evaluation becomes meaningful when context for it is set. I am glad to see the white paper set the following context: “Given HCE’s current and anticipated limitations, SIMalliance considered HCE to be best utilised in use cases where stringent security requirements, optimal transaction speeds and always- available functionality are not mandatory.”

Secure Element (SE) is a more mature and established technology supported by standards groups (ETSI, 3GPP, GlobPlatform and Java Card). Not only does it provide more security for NFC services, but also it has an established certification process. At the same time, SE embedded in SIM cards are controlled by the telecoms, and SE embedded in devices are controlled by device manufactures. They are not open to developers to use freely. Therefore SIMalliance recommends that, “MNOs should request OEMs to implement default NFC routing to the SE”.

So the questions are how many NFC apps need to have stringent security requirements, and how fast telecoms and device manufacturers can implement default NFC routing to the SE. Telecoms and device manufacturers want to make a profit by controlling SE access. That’s why Google is using HCE to implement Google Wallet thereby bypassing the control. I think HCE is here to stay until all stakeholders decide to work together in allowing NFC technology to develop to its full potential.

NFC Mobile Wallet and Incoming WIMA-USA Conference

A friend called me from an AT&T store. “Hi. I want to buy a phone that does Google wallet, and I can’t get a straight answer from the sales person.” Apparently it is very confusing for consumers to know their options in selecting a phone that works with mobile wallet. Here is some information on this topic for curious minds.

Google wallet uses NFC technology. This is how it work.

  • User owns an NFC enabled Android phone.
  • User downloads a mobile wallet app from Google Play, an app store, to their phone.
  • User launches the app and enters credit card information to it.
  • User uses the phone to pay bills at stores that have NFC readers available.

Google wallet was released in 2011. The mobile phones sold in Verizon and T-mobile stores don’t support it because Verizon, T-mobile, and AT&T all invested into ISIS, a mobile wallet joint venture. ISIS was in trial in Salt Lake City and Austin in 2012 and will be rolled out nationally sometime in the near future. If you are interested in these topics, you might want to consider attending the WIMA-USA conference.

WIMA-USA NFC & Proximity Solutions conference will be held in San Francisco on Oct 28-30th. The conference will have a rich conversation about contactless communication including NFC, Bluetooth, and QR code. An Early Bird 20% discount on the Full Access Pass (1or 2 days) is available until September 13th using code: EBUS13.

This is the 3rd WIMA conference in USA and you can read about my WIMA NFC 2012 conference experience here.

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