NFC is not a new concept. However, as the potential demand for micropayment increases, various international mobile brands, aiming at this market in 2011, plans to promote NFC new cell phone in the second half of 2011 and in 2012.

What’s NFC?

Near Field Communication technology is evolved from the integration of RFID (Non-contact radio frequency identification) and interconnection technique. NFC devices shall be installed in cell phones, PDA, digital cameras, wrist watches, computers and digital consumer electronics, and through authentication of ID data, products of those two parties are able to exchange data and service through charges. For the future smart phones or other portable devices, it shall be downloaded and paid through devices offering service; ticket of Japanese JR line is an example.

Effective range of NFC is 20cm with active and passive mode. Passive mode can’t transmit signal, so it doesn’t need a battery. And Mifare of Philips and Ferlica of SONY are the bulk stock. FeliCa – a contactless smart card system from SONY, accounting for a high market share in Hong Kong, Shenzhen, Singapore and Japan, are mainly applied to the traffic and finance units. FeliCa has been very popular in Japan, and the chip is embedded in the watches and cell phones. You will get the pass as you put your watch or cell phones at the tickets checking place. Furthermore, the induction time is pretty shorter than that of general contactless chips. Such system is especially practicable for the MRT in Japan with high people flow; while Mifare technique of Philips, with respect to contactless chip cards, has been the leading brand in the industrial field, and has been used for supporting various large traffic systems in the world, as well as providing VISA card service for the clients of banks.

NFC features:

1. Adopt near-field communication standard with communication frequency of 13.56MHz, and NFC shall be used within the range of 20cm.

2. Data transmission speed can select 106Kbit/s, 212 Kbit/s or 424 Kbit/s.

3. NFC technique is compatible with contactless smart card technique as Mifare of Philips and FeliCa of SONY.

4. Active or passive operating modes. The devices with built-in NFC can be operated both under active or passive modes, and general mobile devices can not be operated under passive mode. This feature enables great reduction of power consumption and extension of endurance of the battery. Active NFC device can provide all electric power required by communication with passive devices through internal radio frequency field (RF-field), so as to ensure that the data can be read normally even though power supply is switched off. 

FeliCa technique has been widely applied to the mass transit system of micropayment and micropayment system.

Existing circumstances of NFC cell phones

HTC, cooperating with EasyCard and Taiwan Mobile Co., Ltd., launched a NFC fair-price smart phone - Tattoo owning the function of EasyCard in 2009. And this NFC fair-price smart phone is the pioneer of NFC mobile in Taiwan district; the launched mobiles equipped with NFC function this year includes: RIM flagshipmodels - Bold 9900 and Samsung annual flagship cell phone - Galaxy S II; it is reported that new generation iPhone4S (Apple) will be equipped with NFC function, while LG NFC cell phone will be launched by the end of this year.

Zhou Yongming, CEO of HTC, pointed out in the public activities that NFC would become a new trend of mobile application. He believed that NFC was a near-field transmission technology and users could complete the transaction through putting the cell phones near the cash register, interlink all kinds of terminal equipment through NFC, which can not only be used in the mobile payment, but also become mobile ticket, mobile voucher, etc. NFC will develop a lot in the coming years, have a significant impact on human’s life. In the future, mobile is wallet. According to Zhou Yongming, CEO of HTC, HTC is inclined to strengthen the direction of NFC function. Besides, HTC will successively launch various kinds of cell phones equipped with NFC function.

Anssi Vanjoki, vice president of NOKIA, expressed in public in 2011 that model of smart phones produced by his company would always support NFC in the future, and comprehensively import NFC in 2011, but it was limited to the smart phones. NFC has a pretty good value-added function for NOKIA, but for the decaying market share, it will be tested by markets for the performance.

Flagship model - GALAXY SII, launched by SAMSUNG this year, owns NFC function as well.

Chinese market and development for NFC

NFC and relevant activities of RFID, which are respectively held in Asia and France every year, have gradually drawn attention of communication industry. Especially the relevant application parts in electronic money will be the new star of cash flow service. It is estimated that three communication dealers in China will successively step into and introduce relevant application service of NFC in 2012, so as to gain the small consumption cash flow service of Telecommunication bills; this service has threatened the profit of various banks in China, so the competition between “SIM Card” and “Credit Card (Union pay Card in China)” has gradually taken shape.

The advantage of Telecommunication operators is that they often contact with cell phone factory, communication chip factory, so that they are relatively fast in the application new technology; at present, there are 900 million cell phone users in China, and if NFC service could be added into cell phones, income of communication dealers will increase rapidly. Communication dealers in China have been engaged in development and investment of cell phones with NFC and RFID feature, and through coordination with chip factory, a series of NFC solutions suitable for cell phones will be developed then. These days, some European communication dealers have introduced relevant service, while Chinese communication dealers plan to apply NFC service to the cell phones from the fourth quarter of 2011 to the first quarter of 2012. In terms of chips hardware, TI, Infenion, St and other companies have already launched NFC solutions for selection; however, stability and reliability of RFID and NFC in mainland are relatively insufficient, so it is necessary to be further strengthened.

With respect to mass transit system in China, if buses, subways, taxes and other means of transportation in the first-class city adopt NFC cell phones to charge, and about 20-day commuting fee for a commuter in one month is equal to telecommunication bills in one month; for the Telecommunication operators, it is equal to double of the handled money, while for the electronic money package, the telecommunication industry charges for few commission charges which will bring in a considerable income; therefore, business opportunity of hidden cash flow service of NFC is excited. It is estimated that, after 2012, three main telecommunication dealers in China will integrate electronic money package service through SIM card to create another infinite business opportunity.

Extended application of NFC in America: Google Wallet

In 2011, Google officially has launched the “Google Wallet” service. Google announced that it would cooperate with Citibank, Mastercard（paypass）and Sprint (a mobile operator), and officially promote its “Google Wallet” which is based on NFC technology. So, users will directly conduct induction payment through cell phones. Except for the omission of payment process, it will be further applied and provide more convenient and direct mobile payment function for users, and it is estimated to be officially put into production in the near future.

Google Wallet will be sold in America in the summer of 2011, and Sprint Nexus S 4G is able to download Procedure and use this convenient payment service.

Google Wallet, which is the NFC electronic money package of cell phones introduced by Google, is like building in EasyCard in the cell phones, so that the way of paying is more convenient and faster. The credit cards stored by Google Wallet in the cell phone are not a piece, except for the present partner Citibank of Google, other cooperative credit cards can be stored into the recharge card of Google, and membership cards of cooperative shops can also be stored in it; Google also simultaneously introduces a supporting service ─ “Google Offers” which shall transmit vouchers into cell phones. From the above applications, users will simultaneously finish membership preference, voucher discount and credit card deduction only passing the cell phones through sensing elements when paying.

In order to ensure the individual capital will not flow out, Google has built in multiple sets of security mechanism to protect users’ credit card data. For the hardware, only when the Google Wallet is set under open and unlocked status will NFC chip open the protective measures so as to reduce the opportunity of data being logged; for the software, it collocates PIN code of cell phones, data encryption and key lock, so that the client of cell phones will not display complete credit card number; in addition, if users lose cell phones carelessly, they can clear data through remote system of Google. Among the partners of Google Wallet in America, Mastercard plays the most important role, because 300,000 established strongholds of Mastercard PayPass in the world will use Google Wallet to pay the bill.

Google Wallet firstly plans to support one model of cell phone - Sprint Nexus S 4G through Procedure mode. Procedure itself is free and is now under system tests. It is estimated that Google Wallet will officially adopt it in the summer of 2001, but there is no plan to use Google Wallet in other places in the world. Stephanie Tilenius, e-commerce vice president of Google, expressed in the D9 meeting that only Android cell phone shall execute Google Wallet function in the beginning, and function of this electronic money package shall be operated in any cell phones in the future, even be used by sticking NFC chip on the back cover of cell phones.

The concept of Google Wallet is to lead consumers and commercial circles into a new world. And in the future, you can collect your credit cards, vouchers and receipts in your cell phone rather than in your wallet. Google also thinks it the best time to sell ads. Retailers will put tickets and point cards into Google Wallet, which is helpful to trace and attract customers. Some famous brands such as Macy’s, RadioShack, Subway Super Mall and Toys R US will participate in the trial use.

There are still some secret worries about Google Wallet, which makes its future development unpredictable, and the writer lists all the doubt in the following:  

1. Are the consumers willing to use Google Wallet? Except for the convenience, preference, discount or other incentives provided by Google Wallet for consumers will be re-strengthened, which shall further change payment habit of consumers and then make them adapt to the payment with smart cell phone.

2. Google must hunt for more mobile companies to cooperate. Sprint is the third largest wireless operator in America. And AT&T, Verizon and American T-mobile of the other top four operators have already organized Union to start electronic money package of their own. Whether Google has the opportunity to cooperate with this Union, it is still unknown.

3. It is short of the matching cell phone. Nowadays, Google Wallet is only available for Sprint Nexus S 4G. If smart phone promoted by the other mobiles brands and NFC chip cell phone which are to be promoted by Blackberry RIM will be interlinked with Google system, spread effect of this service must be sped up.