The Basic Concepts of NFC

and it’s future within Mobile Commerce

Author: Ade Okuboyejo

NFC Technology

Near Field Communication (NFC) is a standards-based short-range wireless connectivity technology for electronic devices

A set of standards Range typically up to 10cm Frequency 13.56 MHz Data rates 106,212,424 kbits No battery required

NFC Uses

NFC Tag Types/modes of operation Active mode of communication: In the

active NFC mode of communication, both devices generate an RF signal on which the data is carried

Passive mode of communication: In this mode of communication, only one NFC device generates an RF field. The second passive device which is the target uses a technique called load modulation to transfer data back to the primary device or initiator

Tag Types:There are several tags specified by NFC forum (Type 1,2,3,4) and each type of cards are suitable for specific task depending on the use case. Type A and B are both based on 13.56MHz but the difference concerns modulation methods

Attach an NFC module to the device peer-to-peer mode : Use the NFC device to

interact with another NFC device e.g. Phone to phone transactions

reader / writer mode : Use the NFC device to read / write external tags

e.g.Mobile as a POS terminal

card emulation mode : Use the NFC device as a tag for external readers

e.g. Mobile as a payment card

NFC Communication modes

Mobile as a payment card, why?

Plastic card Secure element + NFC link

NFC enabled module Secure Element (SIM/UICC card) Co-operating application processor and a

(G)UI OTA (Over The Air) channel

Mobile NFC payment actors

Basically a marriage between banks, MNOs & SPs Several banks and MNOs exist in a given market

A facilitator will simplify the relationships TSM (trusted service manager)

TSMActs as a bridge between SP’s, MNO’s and the final customer, providing trusted services securely over the mobile network. A TSM can also be applicable to non-NFC provisioning

Secure Elements

Host Card Emulation (HCE), which enables NFC payments and other secure services to be delivered without the use of a physical secure element is also an option

TSM TypesSEI TSM manages Secure Element(SE) lifecycles and Secure Domain(SD) for Service Providers(SP) e.g. Partitioning securely SE memory into separate domains for SP’s

SP TSM manages the service provider application provisioning to the SE and its application lifecycle

Secure key storage Secure physical premises High quality processes Security built in deployed solutions

Payment schemes such as Visa and MasterCard require stringent certification criteria

To manage end-2-end security, a key ceremony takes place between:

1. Banks & TSM2. MNO’s & TSM

The TSM is then able to unlock the SE and establish an encrypted link between the SE and the TSM server

TSM Certification

Mobile NFC payments architecture

NFC Standards

ISO 14443 (Contactless Integrated circuit cards, proximity cards) Standardises physical characteristics, radio interface, initialization/anti-collision

& transmission protocols Type A & B depending on radio interface

ISO/IEC 15693 (Contactless Integrated circuit cards, vicinity cards ) RFID item tracking

ISO/IEC 18092 or ECMA 340 (Near Field Communication interface and protocol, NFCIP-1)

Standardises RF field/signal interface, initialization/anti-collision & transmission protocols

Active and passive RF modes, peer-to-peer mode Several data rates

ECMA 352 or ISO 21481 (NFCIP-2) Specifies operating mode selection (ISO 14443, 15693, NFCIP-1)

NFC Module

NFC Reader

UICC-NFC module interface

ETSI TS 102 613 : Single Wire Protocol (SWP) Implementations (mobile handset & UICC) are beginning to

emerge SWP specifies only hardware layer & an overlay software standard

is necessary ETSI TS 102 622 : UICC-Contactless Front-end interface, Host

Controller Interface (HCI) Provides a software (API) standard on top of SWP Implementations (mobile handset & UICC) are yet to emerge

UICC

NFC module

Application processor – UICC interface Hardware/low level standards 3GPP TS 11.11 SIM-ME interface/ETSI TS 102.221 UICC-Terminal

Interface ISO 7816 based communication Serial,low speed (9600 bps) Physical (hardware) & Logical (API) Implementation widespread

ETSI TS 102 600 Smart Cards : UICC-Terminal interface, Characteristic of the USB interface

Fresh specification Also known as high spec interface Speeds up to 12 Mbps Implementations yet to emerge

Appl. processor

UICC

Application processor – UICC interface Software/ high level standards 3GPP TS 11.14 SIM application toolkit /ETSI TS 122.038 USIM

application toolkit/ETSI TS 102.223 (Card Application Toolkit) Enables UICC to take initiative (proactive) Implementations widespread but full implementation on the terminal side is

rare Boring text based MMI

JSR 177 Security and Trust services API for J2ME Initiative from application processor (Midlets) Implementations reasonably widespread

OMA SmartCard Web Server (SCWS) Initiative from a browser on the phone Implementation is not widespread Rich graphical MMI is possible

Appl. processor

UICC

Application processor – NFC Module interface No widely agreed hardware standard (12C, USB etc)

Probably not so important for service providers since the terminal manufacturer integrates NFC module in the mobile

NFC Forum’s work on NCI (NFC Controller Interface) Standardisation of APIs for this interface Ongoing work

JSR 257 Contactless communication API for J2ME Specifies high level APIs for this interface Nokia has already implemented it on 6131_NFC

Appl. processor

NFC module

OTA Standards/Technologies

GlobalPlatform Initiative from the financial industry Security domain creation and manipulation on the UICC Secure channel protocols (SCP) Commands for Secure application download/install/delete/lock etc

3GPP TS 03.48/ETSI TS 102.225/226 Remote APDU structure for UICC based applications (push data

directly to the UICC from a remote server) Aligned with GlobalPlatform commands

Midlet proxy method Use a midlet in the mobile to proxy communication between the server

and the UICC

OTA Server

UICC

NFC Forum

Committees

Working Group

Task ForceArchitecture, Test tool, RF testing. Air transport, Tags & Formats, Wireless charging

Marketing, Compliance, Technical

Testing, security, NFC devices, Interfaces, Digital, Compliance program, Payment, Retail, Transport

NFC Forum standards NFC Data Exchange Format (NDEF)

The basic format (bit level) in which data are stored in NFC tags (or devices).

Record Type Definition (RTD) specification High level definition of different types of NDEF records (ie

information and action) Text, URI, Smart Poster

Tag type technical specification Tags are categorized into four main groups.

mCommercemCommerce is essentially electronic commerce over wireless devices. It helps to connect merchants and consumers via smartphone using technologies such as NFC and QR codes

3 types of mCommerce transaction are:• Carrier based transaction• Use of credit card over a wireless network• Financial services

Benefits of mCommerce are:1. Increase sales and customer loyalty2. Reach target market in real-time via ad

Partnership/Alliances• Common Mobile Marketing Platform (includes Weve, Isis, WyWallet)• Global Ticketing Interoperability

mCommerce Automated Work FlowKey actors• Consumers• Companies (manufacturers, retailers etc)• MNO’s and SP’s• Enablers and Regulators

Inventory updateAccount updateShipping detailsshipping label

Payment gateway transfers the fund to the merchant’s bank account

The online store transmits the formatted order from the web host to the payment gateway

Online buyer purchases a product at merchant site

Consumer’s information is encrypted while being transferred over the internet

The payment gatewaycontinues processing the transaction, it then transmits a request for the card to be changed to MEPS for validation

Transaction confirmation.Shipping and tracking information

PRODUCT RECEIVED

mWalletIs the graphic user interface used to control the card applications stored on a handset. A kind of electronic purse

Issuers of mWallet can benefit from:• Increased revenue through new value added

services• Multiple branding possibilities• Enhanced brand stickiness• Market reach to new segments• Harness NFC opportunities

End-users of mWallet can benefit from:• Ease of use and convenience• Flexibility• Specialised offers• Ubiquity• Security and Confidence• Person 2 Person money transfer• International remittances

Google Wallet

• Enable secure payments to be made using NFC

• The new Android 4.4 introduces HCE• Possibility exists to sidestep SE and

TSM• Softens the influence of telco-run NFC

schemes such as Isis in dictating the direction NFC takes

Google Wallet is a mobile payment system developed by Google that allows its users to store debit cards, credit cards, loyalty cards, and gift cards among other things

NFC, hype or reality NFC handsets

Few models already in market Motorola, LG, RIM etc have

announced commitment to NFC 500 million units by 2015 Cost coming down as the volume

grows

NFC tags List price of NFC tags is as low as

$0.16

Revenue Stream

Future of NFC

Mobile NFC opens up new opportunities in payment, banking, airline ticketing, online shopping and transport

Most of the crucial standards are already in place, but implementation are not sufficiently widespread

The rollout of SCWS would provide a new environment in which to develop, execute and distribute content rich applications from the SIM thereby complementing NFC

Mobile NFC is now finding it’s uses in phone to phone data exchange, ticketing and payment. This will continue to grow as more NFC handsets are available and interoperability issues are addressed

Difficulties

Lack/cost of NFC mobile phones Compatibility with existing contactless infrastructure Cost of high memory, multi-application UICC cards Existing proprietary implementations (Mifare, FeliCa) does not

fully comply with existing contactless standards

Thank you!

Glossary

OMA Open Mobile Alliance

USIM Universal SIM

USAT USIM Application Toolkit

BIP Bearer Independent Protocol

3GPP 3rd Generation Partnership Project

ETSI European Telecommunication Standards Institute

TSM Trusted Service Manager

HCE Host Card Emulation