33 - Recent technical developments and implications
This restriction was resolved in the 1990’s by Philips and Sony. The two companies jointly developed a standard for two way contactless communication. The standard was called Near Field Communication or NFC and while this standard was available throughout the 1990’s it was only acknowledged by the ISO organisation in 2003 and from that moment became an open standard for two way contactless communications. Along with the development of two way contactless communication there have also been recent advances in the speed with which the data is transferred and the security of the transferred data through encryption. The critical developments of two way communications, faster data transfer speed and increased data security have made contactless technology ripe for use in payments. These developments have been the catalyst for an explosive growth in the use of contactless technology for payments with the volume of contactless cards growing to hundreds of millions helped in part by strong marketing pushes from the major card schemes. However, because of the interactive communication opportunities offered by the two way capabilities of NFC, this technology only offers its full potential when used with an interactive device such as a mobile phone. NFC is often compared to Bluetooth. Without going into too much of the technical details, it can be said that NFC is a more advanced and preferable technology for payments than Bluetooth as it offers faster connection between devices, less chance of interference, has a shorter range than that makes it more secure for use in crowded places, and finally NFC can be used even when the enclosing device has a depleted battery or is switched off while Bluetooth cannot be used in such conditions. The recent developments in contactless technology culminating in the registration of NFC as an open ISO standard have been the catalyst for the recent renewed interest in NFC based point of sale payments using a mobile device.
4.2
(Non-)availability of NFC enabled phones
The market for NFC enabled phones is still in an early stage of development. At the time of writing of this report there is still only one NFC enabled phone commercially available on the market: the Nokia 6212. Nokia expects the 6212 to be available at the start of 2010. Sagem released the Sagem My 700X NFC in 2007, but demand for this mobile phone was disappointing. Samsung and Philips presented an NFC enabled phone at the GSM 2006 conference in Barcelona, called Samsung X700 NFC, but this phone is still not commercially available7. Other NFC phones have been created8 but only for NFC trials and are not yet commercially available9. Several of the mobile phone manufacturers are currently providing prototype
7
http://mobilementalism.com/2006/02/11/samsung-and-philips-to-show-off-protoype-nfc-phone-at-3gsm/