Written Report

NFC Written Report- PDF Version

Written Report:

Near Field Communication

 

Abstract– This paper presents a summary of research findings from multiple print and non-print sources surrounding both the fundamental technical capabilities and contextual potential impacts of an existing yet (predicted) soon-to-be widely adopted technology: near field communication.  These findings highlight significant trends surrounding potential adoption barriers and the wider significance to our global culture including issues of consumer data usage.  To conclude, we offer our suggestions on future research paths and provide references for further exploration. 

As a “game-changing concept”, NFC is more than just a “gobbledygook name” of which many technology users have little knowledge of, our research suggests (Bosker).  Once deployed within a mobile device, NFC is “on track to go mainstream” (Bosker) with its ability to “centralize a user’s life” creating a “swiss army knife” technical tool (Fischer 22) for mobile commerce transactions, data collection, ticketing & more.  As a potentially evasive technology, the implications of these and future NFC applications must be explored beyond the context of user life-style.

 

  1. INTRODUCTION

Near Field Communication, or NFC, is a “contactless technology” that allows devices, such as smartphones, to “share and access data over short ranges” (Rooney).  Described as a “magic wand” technology (Fischer 22), the “close range” wireless data exchange allows devices to communicate by coming into close contact with one another (Bosker).  As “both a ‘read’ and ‘write’ technology” (Bosker), NFC is mundane in that the technology is based on a simple RF connection between two NFC products (Fischer 22).  As the RF connection is limited to around four centimeters in range (Bosker), a resulting connection indicates user intent and allows your “favorite electronic companion” to become your “magic wand” (Fischer 22).

  1. NFC CONTENT & CONTEXT

Opening the black box, we discover NFC is “based on inductive-coupling, where loosely coupled inductive circuits share power and data over a distance of a few centimeters” (“NFC Forum”).  Typically, there are two pieces of technology involved in a near field communication process: an NFC-enabled device connecting/communicating with another “NFC-enabled device” or an NFC tag (“NFC Forum”).  These pieces can include both passive technology ( where the item “does not provide its own source of energy”) as well as active (includes “a self-contained energy source”) technology (Fischer 22).  Significantly, passive NFC tags “can be made inexpensively and last virtually forever” (Fischer 22).  Typically, an NFC tag is passive and “stores data that can be read by an NFC-enabled device” (“NFC Forum”).  Meanwhile, NFC-enabled devices, such as smartphones, are complex in their ability to switch operating modes which can include:

  • Reader/writer Mode:  In this mode, an NFC-enabled device “initiate[s] an operation with a passive tag” (Fischer 22), such those on smart posters (“NFC Forum”).
  • Card Emulator Mode: Similar to a “traditional contactless smart card” (“NFC Forum”), an NFC-enabled device “will appear to a reader/writer as a passive tag, but in fact can be active”(Fischer 23), allowing it to “look like any selectable number of tags for the users” and also to allow the device to be read as a “default” tag when “powered down or out of battery” (Fisher 23) or without changing the existing infrastructure  (“NFC Forum”).
  • Peer-to-Peer Mode: Here, two NFC-enabled devices exchange data (“NFC Foum”), mandating both an “active initiator and active target”- i.e., a phone and another device (or another phone) sharing “data as network peers” (Fisher 23).   Often leveraging “Bluetooth or WiFi link set up parameters” users can easily share data in this mode by close contact, “such as virtual business cards or digital photos” (“NFC Forum”).

Although unique, NFC builds upon many familiar technologies deployed today.  Specifically, one may think of the similarities to RFID (Radio Frequency Identification) technologies where “a reader/writer is trying to read or write the contents of a tag” (Fischer 22) or contactless cards, which “incorporate a chip (microprocessor) that communicates with a card reader through RFID technology” (“NFC Forum”).  While NFC shares “the basic technology” associated with these, NFC employs “a number of key new features” (“NFC Forum”) including close-range security and standards.  Compared to contactless technologies such as QR or barcodes readers, NFC “can provide a more elaborate data set” when deployed in a mobile phone, such as automatically dialing and storing numbers or addresses and deploying “peer-to-peer connection[s]” to, for example, sync navigation systems (Fischer 24).  Following an un-linear development and production path from similar wireless technologies, NFC is also similar to, compatible with, and, yet unique from, Bluetooth and Wi-Fi.  Most obviously, the technologies’ wireless range (10-meters for Bluetooth and over 100-meters for Wi-Fi) (“NFC Forum”) creates the largest discrepancy and differences in security and establishing a connection (for example touch versus type).  In order to leverage the benefits of these existing technologies, NFC enables “high-bandwidth connections” for some NFC peer-to-peer applications, acting as a “pairing mechanism” to “immediately establish a Bluetooth or WiFi connection” between the touch of two devices (Fisher 25).

As the technology is “based on pre-existing contactless payment and ticketing standards that are used on a daily basis by millions of people using their devices worldwide”, NFC’s future adoption success is heightened despite the non-linear nature of development often found in technology today and, specifically, in regards to wireless technology (“NFC Forum”).  The NFC Forum (www.nfc-forum.org), formed in 2004 “to advance the use of Near Field Communication technology by developing specifications, ensuring interoperability among devices and services, and educating the market about NFC technology”, has helped to ensure NFC standards for “not only the ‘contactless’ operating environment, such as the physical requirements of the antennas, but also the format of the data to be transferred and the data rates for that transfer” (“NFC Forum”).  Acknowledged by the “ISO/IEC (International Organization for Standardization / International Electrotechnical Commission), ETSI (European Telecommunications Standards Institute), and ECMA (European association for standardizing information and communication systems)”, “NFC Forum compliant devices”, including the operating modes discussed, support and are built on pre-existing contactless smart cart standards (the ISO/IEC 18092 NFC IP-1 and ISO/IEC 14443) (“NFC Forum”).  In order for adoption to proliferate, standards will become increasingly important as NFC applications evolve and will need to garner unified support from a number of NFC players including device manufacturers, mobile operators, retailers, and more.  According to our research, based on a survey by Sybase 365, “30% of respondents said a lack of industry coordination is the main problem holding back wider adoption of the technology” (Raice).  Research also suggests, standards implemented “around mobile payments have seen better adoption rates”, specifically in European markets (Raice).  With the support of the NFC Forum and NFC industry providers, NFC standards would allow the technology to “become a global standard on cell phones” and increase adoption (Raice).

Apart from a case-study in global standards adoption, near field communication, as implemented today and in its potential impact, provides a wide context of significance to both the end-user, the industries involved in implementing the technology, as well as those who will utilize the technology for an endless array of applications relevant to nearly any field.  Existing and predicted forthcoming NFC solutions include “simple feature applications” or local applications, such as smart posters, which will “drive investment for adding the back-end” of more complex NFC applications, such as those that need authentication and “virtual-wallet” applications (Fischer 24).  Local applications include “smart objects” or “infotags” which can be placed “in buses, at bus stops, the theater, a restaurant…[or] a pub” and then read with an NFC-enabled device or phone (Kessler).  These applications already impact and will increasingly become significant to a breadth of industries from education (“Students could get their individual daily schedule, announcements, and information about homework by waving their phones past the tags”) to unique projects which will impact daily life for generations, such as NFC tablet enabled gravestones to provide “additional information about the deceased” (see fig. 1) (Kessler).  As our bibliographic reviews reference (https://cct506nfc.wordpress.com/annotated-bibliographies/), NFC applications are impacting practically every field such as transit, healthcare, social media and more (Kessler) while future applications can be tailored to niche use cases.  The most widely discussed NFC application, however, is contactless payment.  As reported by consulting firm Edgar, Dunn & Co, “the market for mobile payments is expected to grow significantly in the next several years, reaching $618 billion by 2016” (Efrati and Sidel).  Despite the expected growth of mobile commerce, the specific NFC application spurs questions and predicted potential impact to areas of consumer privacy and security.

Perhaps most predominantly, marketing and advertising industries serve to leverage NFC technology.  Expanding from the smart poster to include a number of user transactions, including transit and financial, NFC technology, specifically deployed within a mobile device, will collect a wealth of consumer-behavior data which can then be utilized for targeted marketing and advertising services.  Of course, the data shared will be dependent on evolving privacy and opt-in standards.  Dr. Alex Pentland, Director of MIT’s Human Dynamics Laboratory, explains, “Just by watching where you spend time, I can say a lot about the music you like, the car you drive, your financial risk, your risk for diabetes. If you add financial data, you get an even greater insight” (Hotz).  As a tool for financial transactions, NFC becomes “a lot smarter than a card,” states Doug Bergeron, VeriFone’s chief executive, “It opens the door to a rich experience at the point of sale that retailers really covet” (Efrati and Sidel).  While evidently significant for the fields of marketing and advertising, the surge of consumer-behavior data inherent with the use of NFC has and will impact research in a number of fields, specifically social behavior.  Dr. Johan Bollen, an expert in complex networks at Indiana University states, “It is not just about observing what is happening; it is about shaping what is happening…The patterns are allowing us to learn how to better manipulate trends, opinions and mass psychology” (Hotz).  As with the explosion of location-based advertising companies such as Groupon, NFC both serves to leverage the expanding location-based advertising market as well deploy local marketing services such as coupons, loyalty services, and more through the mobile device.  NFC will help to stretch this market even further, where in 2009, BIA/Kelsey estimates small and medium-sized businesses with 100 or fewer employees collectively spent $35 billion to $40 billion in local advertising in the U.S. (Efrati and Sidel).  Uniquely, NFC will also offer instant results for advanced targeting (through mobile transactions), offering retailers additional data on mobile consumers and even allowing companies to prove correlation between in-store sales and ad targeting (Efrati and Sidel).

Acting as a virtual wallet and collector of consumer-behavior data, one research goal was to explore NFC’s impact to the end-user in terms of privacy and security.  Gaining media traction in recent days, both Apple and Google have come under scrutiny for privacy concerns involving the collection of “where and when people user their mobile phones” (Hotz).  As these privacy concerns unfold, we predict they will set standards for NFC data usage in the future while also forming techno-political implications in adoption and standards including those involving financial institutions, mobile operators, and marketing/advertisers.  Evident from both our research and interviews (expert and potential users), one of the largest hurdles to NFC adoption was a perception in lack-of-security, specifically in regards to NFC functioning as a mobile wallet.  Nick Holland, a mobile-transactions analyst at Yankee Group, states, “Because it’s contact-less there’s a perception people can grab it [data] from thin air, but it’s actually a more sophisticated technology than credit cards with a magnetic stripe, making it more difficult to steal a consumer’s payment information” (Efrati and Sidel).  Despite this perception, NFC is “unlikely to put consumers at any greater financial risks”, while “the card companies would cover the cost of unauthorized purchases” (Efrati and Sidel).  NFC expert, Jeffery Fisher, notes the importance of developing standards to keep stored information in “separate data wells”, allowing privacy between different financial or organizational providers as NFC applications evolve (Fisher 24).  Fisher discusses a GSMA NFC Initiative which proposes using a trusted service manager (TSM) between the service provider and mobile network operator layers (24).  The TSMs would be “third party organizations that maintain the security data, meet certain physical storage and protection requirements, and act as liaisons between the customer and the service providers” (Fisher 23).  As also evident in our potential user interviews, Fisher notes the concern over “losing control of a credit card” and provides “over-the-air (OTA) management” as a possible solution, allowing the user to “disable all secure features” by placing a phone call or through a Web portal (see fig. 2) (Fischer 24).  Multiple authentication solutions are possible for NFC mobile commerce transactions, such as “connecting to a service provider via SMS” (Fisher 24).  Here an NFC tag triggers an SMS and a service provider would then both be able to recognize the user’s intent to purchase and “arm” the transaction (via the machine) (Fisher 24).  As most of these solutions utilize over-the-air (OTA) management, when a phone is lost, users could potentially call a number or go to a Web portal and disable or re-enable all secure features (Fisher 24).  While Fisher acknowledges “extensive back-end use cases”, such as these, “may take some time to work out” (24), solutions such as these could create a significant paradigm shift in mobile commerce and banking.

  1. OUR RESEARCH APPROACH

Acknowledging the disruptive power of near field technology, our goal as a research group was to further understand the implications of near field communication to not only the end-user, but also to the expanding ecosystem of NFC providers and NFC-enabled services (see fig. 3).   By examining the social and techno-political significance of the technology, our research has been geared to predict possible implications in the increased adoption of NFC, including the immediate users, manufactures, and service providers, as well as the significance of NFC as an evolving technology, a business enabler, and a case-study in consumer privacy, security, standards and interoperability.  Our research methods included an effort to deeply understand the basic components of the technology as well as its applications through interviews with highly specified experts in the field as well as larger-context expert interviews (https://cct506nfc.wordpress.com/storyboard-and-video/), to build-upon questions and trends forming from extensive academic and industry published research and case-study reviews.  As an evolving technology, our team also sought to become NFC experts by absorbing real-time NFC news via online media journals, technology blogs, and social media platforms such as Twitter.  Our hope is to provide unique and insightful research, beyond the media-hype and relatable to the average user, and to provide this through our online presence (https://cct506nfc.wordpress.com/) in real-time as the significance of NFC continues to evolve and as we continue to expand our research.  The components of our research have included, but are not limited to:

  • Video: Through our research and interviews of potential users we discovered two prominent, alarming trends: generally, there is little to no knowledge of NFC as an existing technology amongst the general public and there is also a threatening perception of the inability to provide secure transactions both through the mobile phone and in case of theft.  As such, our goal for the video was to provide a format, including a series of interviews of potential NFC users, to expose these concerns while also providing expert opinion in response.
  • Poster: As our research progressed, we became increasingly aware as a team of the large scope of players both involved in making NFC possible to the NFC user, in the adoption and development of future applications, as well as the possible wide-ranging impacts to our culture at –large.  Therefore, our poster aims at the significant task of outlining these overarching implications and to provide a top-level over view to such an immense project as NFC.  Combined with our brochure, these elements of our research project provide value to both the average potential user, who may have little previous knowledge of the technology, as well as more advanced experts in the field who seek to explore contextual NFC implications.
  • Survey: Our online survey sought to explore significant implications and concerns found through research including NFC: adoption, application usability, previous knowledge, security & privacy perceptions, and more.  Through the varied question/answer format, the potential collection of these survey would provide both a specific data-set (i.e.- demographics, technology use) as well as opinion trends  through the use of possible answers ranging from “I absolutely agree” to “I absolutely disagree”.
  • Online Presence:  Through our blog, our team’s research and daily updates are accessible globally and in real-time while also providing additional methods to follow a rapidly advancing technology (RSS, Twitter).  Readers are able to access top-level information and summaries quickly and easily while our team also provides the context of research aims and deep level information for those who wish to explore NFC further (as we believe they should!).
  • Interviews: Our interview process included over five potential NFC users chosen at random.  In an effort to capture, and answer, NFC related concerns and implications these interviews included a wide-range of students and professionals from multiple fields, all applicable to NFC, including telecommunications, education, consulting, finance, and more.  As video is an easily viewed and shareable medium, we felt this component would best be used to answer these common concerns through an interlace of NFC expert opinion and in a relatable fashion.  Our aim here is to dissolve some of the common myths surrounding NFC while also providing non-biased expert insight.
  1. FUTURE RESEARCH DISCUSSION AND CONCLUSION

With a “combination of integration of low-power short-range RF circuits, low-power memory, careful software design, good standards for interface specifications, and ergonomic designs”,  we believe NFC widespread global adoption, specifically within mobile devices, is possible, if not eminent (Fischer 27).  Alongside its many uses, near field technology will potentially dramatically impact standard regulations for evolving technologies, security and privacy social and political concerns, and provides a unique, omnipresent tool for research on human behavior.  While we have reviewed case studies of increased adoption, specifically in Europe, since we commenced our research project, we have already begun to see an increase in the number of US corporations who have or are planning to provide NFC devices or solutions, including: device manufactures (Google and predicted in forthcoming Apple models), mobile operators (AT&T, Verizon Wireless, T-Mobile), and financial services (Discover Financial Services, MasterCard, Visa, Citigroup)(Efratie and Sidel; Raice; Rooney).  As these NFC applications serve to impact each of us in unique ways, we believe it is vital to both understand the basic technological functions of NFC while also understanding its contextual implications on an evolving basis.  To aid in this discovery, please visit our blog as well as the condensed list of significant NFC resources below for future research:

Far from comprehensive, we hope this guide, along with our research and online presence, will serve as a starting point for continued research and exploration surrounding NFC, specifically potential niche applications which will serve to strengthen multiple vital functions in an array of significant fields (health care, educations, government, etc.) as well as the technology’s discussed implications, especially surrounding privacy, security, and consumer behavior data collection, in conjunction with future research, discussion, and suggested methods for increased adoption and development to steer the potential impact of NFC technologies in positive directions.

  1. APPENDIX

Figure 1: NFC-Enabled Object – the Grave Stone

Source: http://mashable.com/2010/05/06/near-field-communication/ (Kessler)

As seen through one niche application of NFC, an NFC enabled object posses the ability to alter culture in unforeseeable and endlessly significant variations, such as history and education.


 

Figure 2: NFC as a Mobile Payment Application – an OTA solution

Source:http://mashable.com/2010/05/06/near-field-communication/ (Kessler)

 While multiple back-end solutions are possible for NFC-enable mobile payment solutions, the impact to multiple industries and policy will surely be felt, from the user, retailer, marketer (shown here as MoLo), financial service provider, and more.  Read more on the Molo project here: http://mashable.com/2010/05/06/near-field-communication/.


 

Figure 3: The NFC Ecosystem

Source: http://www.nfc-forum.org/aboutnfc/ecosystem/ (“NFC Forum”)

The image demonstrates membership areas of the NFC Forum.  However expansive, this list still does not grasp the wide impact resulting from possible NFC applications, development and adoption.

Works Cited

Bosker, Bianca. “Can We Do Better Than ‘Near-Field Communication?’.” HuffPost Tech 25 Jan 2011. Web. 30 Apr 2011. <http://www.huffingtonpost.com/2011/01/25/near-field-communication-nfc-term_n_813758.html&gt;.

Efrati, Amir, and Robin Sidel. “Google Sets Role in Mobile Payment.” Wall Street Journal 28 Mar 2011. Web. 30 Apr 2011. <http://online.wsj.com/article/SB10001424052748703576204576226722412152678.html?KEYWORDS=near+field+communication&_nocache=1304036212521&mg=com-wsj#printMode&gt;.

Fischer, J. “NFC in cell phones: The new paradigm for an interactive world [Near-Field Communications].”Communications Magazine, IEEE 47.6 (2009): 22-28. Web. 18 Apr 2011.

“Frequently Asked Questions.” NFC Forum (2010): Web. 19 Apr 2011. <http://www.nfcforum.org/resources/faqs/Frequently_Asked_Questions_About_NFC_Jan_2010.pdf&gt;.

Hotz, Robert Lee. “The Really Smart Phone.” Wall Street Journal 23 Apr 2011. Web. 30 Apr 2011. <http://online.wsj.com/article/SB10001424052748704547604576263261679848814.html?KEYWORDS=near+field+communication#printMode&gt;.

Kessler, Sarah. “NFC Technology: 6 Ways It Could Change Our Daily Lives.” Mashable 06 May 2010. Web. 30 Apr 2011. <http://mashable.com/2010/05/06/near-field-communication/&gt;.

Raice, Shayndi. “Bright Future, Murky Present for Mobile Payments.” Wall Street Journal 23 Feb 2011. Web. 30 Apr 2011. <http://blogs.wsj.com/digits/2011/02/23/bright-future-murky-present-for-mobile-payments/tab/print/&gt;.

Rooney, Ben. “NFC Pay By Mobile Phone Technology Heating Up.” Wall Street Journal 31 Mar 2011. Web. 30 Apr 2011. <http://blogs.wsj.com/tech-europe/2011/03/31/nfc-pay-by-mobile-phone-technology-heating-up/tab/print/&gt;.

Rooney, Ben. “Paying for Your Shopping With a Mobile Phone.” Wall Street Journal 17 Mar 2011. Web. 30 Apr 2011. <http://blogs.wsj.com/tech-europe/2011/03/17/paying-for-your-shopping-with-a-mobile-phone/tab/print/&gt;.

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