Is NFC (Near Field Communication) Dead?

Editorial note: This article appeared in Linkedin on December 7th, 2016

I recently had coffee with a friend whom I hadn’t seen for a while. We chatted about our lives and work. He told me about the Internet of Thing (IOT) product he is marketing, and asked what I was up to. When I told him I was working on the 3rd edition of my “Everyday NFC” book, his next question astounded me: “Isn’t  NFC dead?” Surprised, I looked at him and reassured him it was not, and that I was committed to publishing my book soon. Part of my urgency in doing so is to correct such misunderstandings.

My friend is not alone in his assumption. Even in the technology field, many are clueless about NFC’s many applications in IoT and beyond. Not only is NFC alive, it is a widely used enabler that connects objects to  the Internet. IoT doesn’t exist without smart sensors. As Business Insider pointed out in their article entitled  21 technology tipping points we will reach by 2030 , “1 trillion sensors will be connected to the internet in 2022.” NFC will play a critical role in this process.

What is NFC? NFC is based on RFID technology. It is a technology that enables wireless data transfer in close proximity without the need for internet connection. NFC sensors can be integrated into devices and wearable in many fields. NFC Forum was established in 2004 and leads the effort for the unification of the NFC ecosystem. More than 140 companies are members of the NFC Forum.

NFC Forum has been promoting the relationship of NFC and IoT: “With 38.5 billion connected devices expected by 2020 and over one billion NFC-enabled devices already in the market, NFC is playing a key role in making the Internet of Things a working reality.”

Not only does NFC enable IoT, it plays an essential role in Industry 4.0 (Industry internet) to facilitate connectivity in smart factory manufacturing. The low cost of NFC tags can help identify items, tracking them, and even reflect on their conditions.  For example, the wine industry is using NFC tags to authenticate wine bottles in order to exercise brand protection.

The possibilities of NFC are endless; it is quite alive and thriving!

Three Things That Business Leaders Should Know About Industry 4.0

Editorial note: This article appeared in Forbes on November 1st, 2016

As a business leader, you can’t afford not to know about Industry 4.0 (defined by McKinsey as “the next phase in the digitization of the manufacturing sector”), which will transform manufacturing in a way that impacts profit margin significantly for your business.

While not many people understand or have even heard of the term outside of manufacturing, many business leaders have heard about IoT (Internet of Things). What will happen when IoT becomes fully integrated with other emerging technology, such as big data and autonomous robots? Can you imagine the impact on the world? That’s just one of the questions posed by this new phase.

There are three things that you should know about Industry 4.0: what it is, what the impact is, and what challenges it faces.

What Is Industry 4.0?

Industry 4.0 was an initiative started by the German government in 2006. It has also been called the “industry internet” or “the fourth industrial revolution.” The initiative’s intention is to digitize the manufacturing sector in order to increase productivity. German industry will have invested a total of €40 billion in Industry 4.0 by 2020.

The vision of Industry 4.0 has been adopted worldwide and is influencing other initiatives and cooperative efforts. In general, there are nine key technological components that make up the foundation of Industry 4.0: autonomous robots, big data, augmented reality (AR), additive manufacturing, cloud computing, cyber security, IoT, system integration, and simulation.

Through the interoperability of IoT, computation, networking, and physical processes are integrated as cyber-physical systems (CPS) that cooperate with each other and with human beings in real time. As a result, manufacturers are transforming into “smart factory operators” who manage highly automated, connected equipment, and analyze data provided by the systems.

What Is The Impact Of Industry 4.0?

• New business opportunities. These are created for many vertical markets, such as retail, medical, industrial, automotive and telecommunication industries. According to The Economist, many companies have initiated the effort to digitize factories, such as Siemens, BASF, Bosch, Daimler, Deutsche Telekom, Klöckner & Co., and Trumpf. The products they make are increasingly packed with sensors and connected to the internet in order to provide better products and services for their customers.

• A more efficient value chain: When the system is well integrated, equipment can be run by automated processes. The cost of manufacturing will be decreased and the quality will be better. The impact is on the whole value chain of delivering products to the market. When the value chain is impacted positively, the margin will be impacted accordingly and create a competitive advantage for a company.

• Data-driven strategy and business models: Sensors in CPS and cloud computing enable data collection and analysis in real time. Therefore, issues can be detected and resolved in a timely manner and the product lifecycle can be streamlined based on insights from big data analysis. Also, insights that reflect real-time operations are available for decision makers. Therefore, strategy and business models can be modified quickly to increase revenue.

• A rising need for skills-based training and talents: Specific skills are required to work in a smart factory. The skills will impact education choices and societal structure when traditional labor is being replaced.

Industry 4.0 Challenges:

• Reliability and stability: Since IoT standards are being established, it is a challenge to have a reliable and stable non-proprietary solution for machine to machine (M2M).

• Security: When objects are connected without sufficient security precautions, the system is vulnerable. For example, in 2015, Chrysler recalled 1.4 million vehicles after security researchers found that they could remotely disengage both the brakes and the transmission of a 2014 Jeep Cherokee. This is a challenge of IoT.

• Long-term commitment and development: It takes industry commitment to work on standards and protocols in order to have interoperable solutions developed. The financial investments might impact the effort of long-term development for some companies.

• Skilled labor: German demand for engineers outruns supply right now. This is an example when disruptive innovation happens, a skilled workforce will be difficult to locate.

Only time will tell how smoothly the transition into Industry 4.0 will be for the world of business as we know it. As business leaders, we can stay adaptable by staying aware, informed and prepared.

 

NFC in Action in IoT World

KBNFCNear field Communication (NFC) is a technology similar to Wi-Fi and Bluetooth Low Energy (BLE). At the same time, it’s a powerful enabler. The nature of proximity connectivity realizes the potential of an Internet of Things (IoT). Khushi Baby is one example of the impact such products can make on the world.

Traditionally, haala khaago black thread is worn by Indian children for protecting them from the evil eye. The Khushi baby (KB) necklace is designed based on this tradition. However, the KB is also embedded with an NFC chip that can be scanned by health care providers with a mobile app in a cell phone to obtain the wearer’s immunization record. What is the significance of this technological addition that costs less than a dollar?

Over 1.5 million children die from vaccine-preventable disease each year. In under-developed countries, especially in isolated rural areas, a major barrier to healthcare and immunization provision is tracking health records.  With KB, a child’s data is synced to a cloud database and can be transformed into insights to be acted upon.  Currently, thousands of children are benefitting from simple and inexpensive this innovation.

Another example of NFC in action is the adoption by chip makers. Texas Instruments (TI) is marketing a new NFC-enabled transponder targeted at automotive infotainment apps. The RF430CL330H-Q1 is an NFC Tag Type 4 device that combines a wireless NFC interface and a wired SPI or I2C interface to connect the device to a host.  With a tap, the NFC interface enables end equipment to communicate with the infrastructure of NFC-enabled smart phones, tablets, and notebooks. It’s a path to IoT.

NFC will continue to serve as a powerful contributor to the IoT world. Vision and innovation will be the main driving force.  From rural healthcare to transportation and more, continued creativity and development will unlock worlds of potential for the future.

The Mobile Wallet Showdown: What’s Your Pick?

NFC technology has gained some strength in the mobile wallet arena since Apple released Apple Pay in October 2014 in USA. AppleWatch was released in April, and it supports Apple Pay when paired with an iPhone.

Globally, not only was Apple Pay launched in the UK in July 14, 2015, it also took a step into the Chinese market on June 10 by registering as an entity in the Shanghai free-trade zone. With Alipay, Apple’s main competitor in this market, already clocking over 400 million registered users, one wonders how the race will pan out between the two.

Android Pay, a successor of Google Pay was rolled out a couple of days ago. As of today, it has been downloaded over 81k times, and currently has a 3.9 star rating. Android Pay works on smartphones running Android 4.4 KitKat or newer.

Samsung Pay was released in Korea last month, and has hit 500,000 users now. It will be released in the USA on Sep 28th. Samsung’s smartwatch, Gear S2, will support Samsung Pay in November. Samsung has also formed partnerships in the US and China.

What NFC mobile wallet are you using or will you use?

Seattle folks, join us for a discussion on Mobile Payment on September 24th http://bit.ly/1LHi8Dz

About the Author: 

Hsuan-hua Chang, a mobile technology strategist and business coach,  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” http://amzn.to/1INl703

Read more of her posts at http://bit.ly/1DG2af1mobile wallet

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”

NFC Mobile Payment options: HCE vs SE

When Google made Hosted Card Emulation (HCE) available for its mobile payment in order to bypass telecoms’ control, the debate of HCE and Secure Element (SE) continues.

A webinar “Evaluating NFC security strategies: The role of the secure element in the evolving landscape” was hosted by NFC World on January 20, 2015.

A few highlights of the webinar is as follows:

  • The NFC adoption rate is increasing rapidly based on the stats of NFC SIM shipped; 16M shipped in 2011, 30M in 2012, and 72M in 2013.
  • Geographic stats show the demand in different regions. In 2013, 37M was shipped to Japan/Korea, 24M to North America and 14M to Europe.
  • The pros and cons analysis of HCE and SE technology.
  • A SIMalliance recommended deployment model based on security and market reach, application and technology requirements.
  • A case study on Canada’s success as the #1 mobile payment country in the world. Some stats are as follows: All of Canada’s major MNOs now offer SE based NFC payment capability to their customer; 2/3 of the phones are Android and BlackBerry; 5 of Canada’s “Big Six” Financial Institutions do the same; over 84% major retail merchants have contactless EMV terminals

SIMalliance anticipates a future where SE and HCE will continue to co-exist and in many cases converge. This will be the basis of an optimally efficient and secure NFC ecosystem.

To watch the free seminar, click the link.

blogNFCphone

How to Use Your Mobile Wallet

Last week, two of my friends asked me “What is Mobile Wallet?”. I realized that I need to put aside my excitement over NFC-enabled iPhone6 and just explain the basics in plain English.

A mobile wallet enables you to use your mobile phone for making payments while shopping. Your credit card information is entered and saved in your mobile phone. To simplify the story, I will only focus on two NFC Mobile Wallets: Softcard and Apple Pay.

A mobile wallet is composed of a few components: a mobile application (app), payment options (credit cards), an authentication method for user identification, and an option for wireless transmission.

  • Mobile app: You can download Softcard (formally ISIS Mobile Wallet) from the Google Play Store if you have an NFC-enabled Android phone. If you have an iPhone 6, iPhone 6 plus or iWatch, you can download Apple Pay app from the Apple Store on October 20th, 2014.
  • Payment options: The mobile app allows you add credit card information into a mobile wallet.
  • Authentication: Softcard requires you to enter a 4-digit pin upon payment. Apple Pay uses Touch ID, a finger print identity sensor.
  • Wireless Transmission: NFC (Near Field Communication) is used for both Softcard and Apple Pay. Any NFC-enabled phones such as most of the Android phones and the iPhone 6, can tap an NFC-enabled reader to activate wireless communication between a mobile phone and a cash register that is NFC-enabled.

To Use Softcard (formally ISIS) Mobile Wallet on an Android Phone

  1. Make sure that the NFC functionality is enabled on the device.
  2. Ensure your device is equipped with the required Enhanced NFC SIM card with Secure Element.
  3. Download Softcard Mobile Wallet app from Google Play Store.
  4. Set up an access PIN.
  5. Add the method of payment.
  6. Use the NFC device to pay your bill at stores that have NFC readers.
  • Open the Softcard Mobile Wallet app and enter your PIN.
  • Select a payment card to use.
  • Hold the back of your phone over the contactless symbol on the terminal at checkout.

To Use Apple Pay Mobile Wallet on an iPhone6

  1. If you don’t have Passbook setup, add the credit or debit card from your iTunes account to Passbook by simply entering the card security code.
  2. Add a new card, use your iSight camera to instantly capture your card information or simply type it in manually.
  3. The first card you add automatically becomes your default card.
  4. Download iOS 8.1
  5. Use iPhone to pay your bill at stores that have NFC readers

applepay1

With NFC mobile wallet, you don’t need to carry your credit cards around anymore. It is a safer approach since every transaction has a unique transaction ID and it’s authenticated. Apple Pay seems providing a simpler user experience based on Apple’s website. “One touch to pay with Touch ID. Now paying in stores happens in one natural motion — there’s no need to open an app or even wake your display thanks to the innovative Near Field Communication antenna in iPhone 6. To pay, just hold your iPhone near the contactless reader with your finger on Touch ID. You don’t even have to look at the screen to know your payment information was successfully sent. A subtle vibration and beep lets you know.”

Another note about iPhone6 and iPhone6+, they are really more of an NFC-enabled mobile payment device rather than an NFC-enabled device. All other NFC functionalities besides Apple Pay, have been disabled by Apple.

See more details in my newly released book “Everyday NFC Second Edition”. http://amzn.to/O76fQY

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NFC Enabled Apple Pay

September 9th was an exciting day for NFC enthusiasts and evangelists. Apple announced that iPhone6 would offer Apple Pay, a mobile payment functionality based on NFC (Near Field Communication). The NFC community praised the announcement with relief, “It’s about time.”

The NFC community had hoped that Apple would have adopted NFC for iPhone 5s/5c in 2013. Apple endorsed BLE(Bluetooth Low Energy) instead while continuing to obtain NFC patents. Without Apple’s adoption, NFC has been moving slowly due to the lack of consumer technology awareness. Apple has influenced consumer behavior with an appealing experience and an innovative implementation.  I expect that Apple Pay would help consumers to become familiar with NFC.

Before the announcement, on September 8th, the NFC community had the following questions:

  • Will iPhone6 be NFC-enabled? If it is, what NFC mode will be offered for public use?
  • What type of mobile payment model will be deployed?
  • Will an app development framework be offered?
  • What will be the user experience?

Now, a day after the excitement, the NFC community has more questions:

  • Is iPhone6 capable of reading NFC tags?
  • Can the Softcard (formally ISIS) mobile wallet be used with the iPhone6? What’s the impact to the Softcard?
  • Will the NFC feature be configured on/off in the Setting? What is the default setting?
  • What is the Apple Pay infrastructure?

What are other questions/thoughts in you mind?

ONETOUCHSource: Apple.com

Using a Smartphone to Replace Passwords

Yesterday (7/14/2014), the WSJ posted an article “The Password Is Finally Dying, Here’s Mine”. Mr. Christopher Mims revealed his twitter account’s password to his readers to make the point of “password is dying”. He wrote “Google is working on an as yet unnamed protocol that allows you to connect to your online accounts on any device by authenticating yourself with your smartphone.” He explained that using the device-based authentication was more secure than using a password.

Using a Smartphone for digital authentication is also a mechanism that is built into mobile wallet; for example ISIS Wallet uses Near Field Communication (NFC) SIM-based solution and Google wallet uses NFC Hosted Card Emulation (HCE) solution. So whatever Google is working on probably is also an NFC based solution.

In June, AT&T introduced NFC Connect that enables customers to use digital credentials on their mobile device. The system is being piloted at Tulane University in New Orleans and Quinnipiac University in Connecticut. Students use Samsung Galaxy S III, an Android smartphone and an NFC SIM to access buildings, meal purchases, laundry, copying and printing. This system requires a Trusted System Manager (TSM) to provision a user’s digital credential into SIM Secure Element (SE) over the air when one signed up the service.

It is likely that Google’s digital credential solution is not a SIM-based solution based on its development of Google Wallet. The cost for users could be lower since a provisioning TSM is not required. That’s my speculation.

In another note, in the AWS Summit NY last week (7/10/2014), Amazon announced Amazon Cognito, one of the new Amazon Mobile Services, as a fully managed user identity and data synchronization service. The goal of the service is to help users securely manage and synchronize app data across their mobile devices. It looks like the Mobile market is Amazon’s next move.

It will be interesting to watch the development of digital authentication with smart devices. What is your thought on this topic?

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.