The Next Big Thing

By Karthik Subramanian

Samsung's Nexus S, the first to feature Android OS 2.3 'Gingerbread" and NFC technology

Your mobile phone could do a lot more with Near Field Communications (NFC), a technology with commercial applications that is all set to break through this year across the globe. It's possible to use your mobile phone for cash transactions, just like a credit card, but that is just one of the many applications being looked into, writes Karthik Subramanian

You know a technology is on the verge of a broad-based breakthrough when discussions about it move from boardrooms and geek bulletin boards to public forums.

So when Eric Schmidt, the then chief executive of Google and now its executive chairman, spoke about Near Field Communications (NFC) technology at the Mobile World Congress in Barcelona in February and revealed support for it on Android's OS (Operating System) version 2.3 ‘Gingerbread,' one had believe it was the next big thing.

And, now, there are the obvious signs. Almost all leading mobile phone manufacturers are offering NFC support, starting with their high-end models. Samsung's Galaxy S2 handset will feature the technology. So are some of the high-end models from the company, featuring its proprietary Bada OS. There is speculation that Nokia's upcoming Windows 7 mobiles will all have in-built NFC. Research in Motion (RIM), manufacturers of Blackberry, and Apple are also expected to jump on the NFC bandwagon soon.

Just a few days ago, Rovio Mobile, publishers of the crazily addictive “Angry Birds”, announced a version of the game that will use NFC to make the game “social”. With “Angry Birds with Magic,” users will be able to unlock new levels each time they tag another NFC-enabled phone. The NFC-enabled game is expected to ship pre-installed with Nokia's new range of handsets, including Nokia C7, to demonstrate new possibilities of the technology. NFC is not just mobile banking but can also be used as a tool for “social networking”. In fact, NFC has been used rather manically and innovatively in Japan.

About NFC

So what is NFC and why is it making waves?

Near Field Communications technology has existed for some time now. It is a short-range wireless technology (typically of 4 cm or less) and works on the principle of inductive-coupling. Loosely coupled inductive circuits share power and data over the distance. NFC devices share the basic technology with proximity RFID tags and contact-less smartcards but have a number of new key features.

According to some estimates, by the year 2013, there would be as many as 700 million NFC-enabled mobile devices in the world. More importantly, the commerce potential of the technology, especially using it as a mobile payment gateway, is massive. Users will be able to swipe their phones for mobile payments, identity card tagging, gift coupons, besides several more applications.

Over the past couple of years, several companies have run trials to use NFC as a payment gateway across the globe. A website dedicated to following developments of the technology — www.nearfieldcommunicationsworld.com — lists as many as 200 trials across the globe, including a few in India.

Tap and pay

One of the prominent pilots in India was Citibank's ‘tap and pay' project, in association with Nokia, Vodafone and Mastercard. The NFC technology and terminals for the 6-month pilot study that was conducted last year was provided by ViVOTech.

During the trial, eligible Citibank credit cardholders purchased NFC-enabled Nokia 6212 handsets from participating Nokia shops where store staff assisted them in setting up the service so that they could walk out of the store with a “payment ready” mobile device. The phones were available at a discount and other attractive incentives were made available to encourage usage. Citibank also enabled 250 merchants to provide payment gateways during the trial.

According to a research paper on the pilot study published by consulting firm Edgar, Dunn and Company, despite some teething problems, most of the customers and merchants found NFC-enabled payments not just convenient but also “cool”.