Apr 13, 2012

Speculation about whether Apple would include NFC (near field communication) capabilities in its rumoured iPhone 5 has been rampant this year, fuelled by growing interest in the technology and its rapid push into the mainstream through inclusion in smartphones.

Yet Apple is too late to claim first-mover advantage: devices including Nokia's 6131 NFC, SAGEM's my700X, Samsung's D500E, BenQ's T80, Sagem's Cosyphone, Google's Nexus S, Nokia's C7, Samsung's Galaxy S II, and Research In Motion's BlackBerry Bold 9900 and 9930 all incorporate NFC capabilities, allowing them to read information from 'passive' tags or wirelessly communicate with other devices using an 'active' or 'peer-to-peer' mode. NFC support is built into the later versions of two key mobile operating systems (Android 2.2 and BlackBerry OS 7.0) and, if it's added to iOS 5, would become well-established on the key consumer smartphone platforms.

Short range

But exactly what is NFC, anyways? It's effectively a souped-up, more-open version of existing contactless communications technologies, which long ago standardised on the ISO/IEC 14443 standard to facilitate interoperability. These technologies include both contactless swipe cards used for building access control and other applications, and RFID (Radio Frequency Identification) tags used for security, asset tracking and other applications in agriculture, logistics and other industries (RFID is also governed by the ISO 18000-3 standard, with which NFC is compatible).

NFC works using magnetic induction: a reader emits a small electric current, which creates a magnetic field that in turn bridges the physical space between the devices. That field is received by a similar coil in the client device, where it is turned back into electrical impulses to communicate data such as identification number, status information, or any other information. So-called 'passive' NFC tags use the energy from the reader to encode their response, while 'active' or 'peer-to-peer' tags have their own power source and respond to the reader using their own electromagnetic fields.

Like RFID, NFC works in the 13.56MHz radio frequency spectrum, using less than 15mA of power to communicate data over distances that are usually far less than 20cm. Tags typically store between 96 and 512 bytes of data and transfer data using at speeds of 106Kb/s, 212Kb/s, 424Kb/s or 848Kb/s – enough to move small pieces of information virtually instantaneously, as is essential in high-volume transport applications.

NFC interfaces are defined in a pair of ISO and ECMA standards. ISO/IEC 18092 / ECMA-340 defines communication modes for NFC Interface and Protocol (NFCIP), setting active and passive communications modes and relevant modulation schemes, codings, transfer speeds, frame format, collision control parameters, transport protocol and more; ISO/IEC 21481 / ECMA-352 defines NFCIP-2, which specifies communications modes to minimise interference with other contactless card devices.

Support for those legacy devices could help speed uptake of NFC: by offering backwards compatibility with ISO/IEC 14443 and Sony FeliCa-compliant contactless payment cards, the new devices can, when supported by appropriate software, interact with millions of existing card readers; indeed, NFC's 'card emulation' mode makes it look like a conventional contactless card. On a related note, some operators have explored the potential for adding de facto NFC support by equipping mobile SIM cards with ISO/IEC 14443-compliant chips, which will allow phones to run payment applications using existing physical infrastructure.

The NFC ecosystem

The real value of NFC, however, comes not from its technical workings but from the protocols that have been built around it. By setting standards and building layers of abstraction on top of core NFC functionality, smartphone platform vendors can give developers a rich set of interfaces for interacting with the NFC ecosystem.

For example, industry peak body NFC Forum has been filling out the NFC family with protocols like NFC Data Exchange Format (NDEF), which allows the storage and communication of binary documents including MIME objects (images, PDFs and so on), URLs, and other details. NDEF record types specify whether the object is a Smart Poster, Text, URI, Signature, Generic Control, or a handover control specification, with Service Discovery Protocol, IP, OBEX and SNEP bindings allowing links to other types of objects.

NFC's rapid and promiscuous communication has made it well-suited for public transport, where the ability to quickly read ticket information has made it a staple in countries like Singapore, Japan and the UK; NFC is also used in Victoria's struggling Myki program. In Europe, the transport industry has already converged around the interoperable Calypso contactless ticket standard, addressing the compatibility issues that plague NFC applications.

Point-of-sale transactions are also possible through NFC, with card-based services like Mastercard PayPass eventually likely to allow NFC-equipped mobiles to act as virtual 'wallets' holding banking, loyalty program, personal preferences and other details. That's obviously a very high-security application, so banks will drive those rollouts at their own speed and using security they're happy with. 

Early internal trials at the likes of Westpac and ANZ Bank have had a positive response, while mobile-communications peak body the GSM Association (GSMA) is promoting takeup with its Mobile NFC specification, Pay-Buy-Mobile global payments approach and the ISIS specification to provide a single global mechanism for NFC payments.

Proper functioning of an NFC application depends on a vast array of interconnected systems to receive, process, store and audit transactions – and this is where NFC has struggled in the past. Another enemy is inertia: contactless systems will only really take off with widespread support from financial services, public transport, and other bodies. And, paradoxically, the only way those bodies will support NFC is if there are enough consumer devices in the field to justify investing to build the ecosystems.

Doing so is still a leap of faith that few are ready to take: a recent tender for a nationwide multi-use NFC infrastructure issued by Singapore's Infocomm Development Authority specified that providers could expect to kit out 4,000 merchant locations to service just 30,000 subscribers two years into the program – which is expected to go live early in 2012.

Little wonder pundits are excited about NFC-enabled smartphones: once everybody has one, there's more reason to invest in workable ecosystems – and for developers to utilise NFC in ways that have nothing to do with payments. For example, smart commercial signage can transfer promotional details to a phone held momentarily against a poster or product tag. Or an interactive museum tour that lets visitors hear an audio narration, in their own language, by holding their phone against the display case.

Such applications shine when compared to Bluetooth, since they don't require pairing. NFC is even being tapped as a way of speeding the pairing of Bluetooth devices by automatically exchanging authorisation keys. Such 'tapping' or 'bumping' actions are also being explored as drivers for social applications, such as a Nokia-led partnership with Angry Birds developer Rovio that enables a version of the game that allows certain levels to be unlocked when two NFC-equipped Nokia C7 smartphones are tapped together.

This type of functionality would also enable the easy exchange of business-card and other personal information – a practice that has been stymied by Bluetooth's ponderous pairing processes. Just where developers take this technology is anybody's guess, but they now have free rein after toolkits such as the free libnfc provide interfaces for NFC devices, and Google's Android 2.3.3 update added enhanced NFC capabilities.

Research firm Pyramid Research has predicted sales of 250m NFC-capable smartphones – 28 per cent of all devices sold – by 2015. Progress towards this target is being hastened by an increasingly visible role for industry peak body NFC Forum, which recently welcomed Google as a principal member and adding 31 members to bring its membership to 135 companies. The group also launched N-Mark, a certification program that will indicate tested compliance with NFC standards and is intended to become a universal symbol for NFC capabilities. Given a few years, efforts to standardise the NFC experience across devices and platforms should usher in an entirely new era of mobile payments and long-promised smartphone 'wallet' applications.