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What is NFC?

1. About NFC

Near Field Communication is a short range wireless communication technology which is evolved from Radio Frequency Identification (RFID). It is a short-range, half duplex, high frequency, low bandwidth wireless communication technology which was jointly developed through NFC Forum which was founded to advance and standardize this technology. It enables communication between two NFC enabled devices within few centimetres. It operates at 13.56 MHz and can transfer data up to 424 Kbits per second. It can operate in three operating modes; reader/writer mode, peer-to-peer mode and card emulation mode. Each operating mode provides various different applications as well as has distinct benefits for the uses. Users can make payment using their NFC enabled mobile phone or can use it as an electronic key. There are unlimited possibilities and any service provider can provide a value-added service by establishing its own NFC application.

1.1.    NFC Works very Intuitively

Two NFC devices immediately start their communication as they are touched. The touching action is taken as the triggering condition for NFC communication. This simple model is actually one important property of NFC technology. NFC technology requires touching two NFC compatible devices to each other in a few centimetres. User awareness is definitely a must in order to perform NFC communication.

1.2.    A Simple Touch

NFC technology interaction technique is seen as touch based interaction. User first interacts with a smart object (either an NFC tag, NFC reader, or another NFC enabled mobile phone) using her mobile phone. After the touching occurs, mobile device may make use of received data and thus may additionally use mobile services as well, such as opening a web page, making a web service connection etc.

1.3.    Inherent Security

One of the NFC technology’s major properties is its implicit security because of short communication distance. Close proximity of two devices makes the signal interception probability very low.

1.4.    Pairing Capability

An installed application on mobile device is automatically launched when it finds the matching pair. Think an application that reads concert events from an NFC tag. This application can be programmed to run automatically when mobile phone is touched to an NFC tag which consists of the event information. It can do all of the processing until a user intervention is required.

2.      Standardization and Development of NFC Technology

NFC technology benefits from various elements such as smart cards, mobile phones, card readers, payment systems and so on. All these elements need to acquire accreditation from an assortment of governing bodies that have the responsibility for the security and interoperability of various NFC  devices. As mobile phones became the best solution for NFC technology, especially for secure transactions, various standardization bodies defined how the NFC technology should be integrated into mobile phones and other related devices. Some other bodies defined the architectures and standards for the security as well as the ancillary technologies for NFC enabled mobile phones, such as smart cards for NFC transactions. The common vision of all standardization bodies is to increase the ease of access, interoperability and security for NFC technology. Some of the important standardization and contributing bodies are NFC Forum, GSMA, GlobalPlatform, ECMA International, EMVCo, ETSI and its Smart Card Platform, OMA, JCP, ISO/IEC.

3.      Architecture of NFC Enabled Mobile Phones

A mobile device integrated with NFC technology is typically composed of various integrated circuits, SEs and an NFC interface. The NFC interface is composed of a contactless, analog/digital front-end called an NFC Contactless Front-end (NFC CLF), an NFC antenna and an IC called an NFC controller to enable NFC transactions. Apart from an NFC controller, an NFC enabled mobile phone has at least one SE which is connected to the NFC controller for performing secure proximity transactions with external NFC devices. The SE provides a dynamic and secure environment for programs and data. It enables secure storage of valuable and private data such as the user’s credit card information, and secure execution of NFC enabled services such as contactless payments. Also, more than one SE can be directly connected to the NFC controller. The supported common interfaces between SEs and the NFC controller are the SingleWire Protocol (SWP) and the NFC Wired Interface (NFC-WI). The SE can be accessed and controlled from the host controller internally as well as from the RF field externally. The host controller (baseband controller) is the heart of any mobile phone. Host Controller Interface (HCI) creates a bridge between the NFC controller and the host controller. The host controller sets the operating modes of the NFC controller through the HCI, processes data that are sent and received, and establishes a connection between the NFC controller and the SE.

4.      NFC Applications

4.1.     Information Gathering and Smart Poster Applications

The reader/writer mode is about the communication of an NFC enabled mobile phone with an NFC tag for the purpose of either reading or writing data from or to those tags. It internally defines two different modes: reader mode and writer mode. The most important application can be performed in this mode is the transfer of data which can be a text, a URL, a product identification, or some other type of data. After the transfer operation, data can be used for many purposes by the mobile phone according to the design. A vast number of scenarios are possible in this mode. Companies or professionals might be willing to design projects in this mode because of the flexibility of different data type to be stored on the NFC tag, as well as the flexibility on how to use that information. Hence, a wide range of applications in health, education, and entertainment may be potentially generated using the reader/writer mode. Smart posters are the most common usage area of the reader/writer mode.

4.2   Pairing, Sharing and Exchanging Applications

Peer-to-peer mode enables two NFC enabled mobile devices to exchange information such as a contact record, a text message, or any other kind of data. This mode has two standardized options; NFCIP-1 and LLCP. NFCIP-1 takes advantage of the initiator–target paradigm in which the initiator and the target devices are defined prior to starting the communication. However, the devices are identical in LLCP communication. After the initial handshake, the decision is made by the application that is running in the application layer. Peer-to-peer mode is generally used for device pairing, networking, and file transfer operations. Pairing Bluetooth devices, exchanging business cards, making new friends on online networks (Twitter, Facebook etc.,) and gaming are possible implementations of this mode. Peer-to-peer mode provides easy data exchange between two NFC mobiles. Easy data exchange between two NFC compatible devices provides the possibility for secure exchange of private data. NFC devices can transfer data in a few centimeters, so exchanging private and important data may be one of the key future applications of this mode.

4.3   Card Emulation Mode Applications

Card emulation mode provides the opportunity for an NFC enabled mobile device to function as a contactless smart card. Mobile devices can even store multiple contactless smart card  applications in the smart card. The leading examples of emulated contactless smart cards are credit card, debit card, loyalty card, transport cards, identity or access cards. Card emulation mode only removes the need for carrying the cards. People carry mobile phones with them most of the time so coupling mobile phones with the  human body fits with their use. One can expect that in the near future people will carry NFC enabled mobile phones not just to gain mobility but also to perform daily functions as well. All credit cards, keys, tickets, and so on will be possibly embedded into mobile phones. Hence, there will be more opportunities to integrate daily objects into NFC enabled mobile phones in the future.

5        NFC Ecosystem

The NFC ecosystem is tremendously dynamic. NFC industry is a new emerging business environment and large value chain including several industries and organizations; Mobile Network Operators (MNOs), Trusted Service Managers (TSM), banking and payment companies, semiconductors and electronic appliances including mobile handset makers, software developers, and other merchants including transport operators and retailers. The type of NFCenabled service defines the complexity in terms of which business model is applied, which stakeholders are involved, the appropriate collaboration model, the revenue model among players, and so on. NFC is a new technology and it is essential to perform more than justifying customer needs and expectations.

Currently,mobile financial services (payment, ticketing, loyalty, transport etc.,) are the most promising opportunities in the NFC context. Also, they have highest complexity from both technological and business aspects with respect to other NFC services such as smart poster services, social networking, games, and so on.

5.1   Trusted Service Manager (TSM)

A TSM is required to create and manage a trusted environment among actors of the NFCecosystem, mainly between service providers and MNOs. Integrating TSM into the ecosystem enables secure communication and interest protection of each entity, and also reduces the complexity of business models. On the other hand in order to provide simplicity, the players need to be in touch with each other which creates a complex communication environment when no TSM is used. As an alternative, TSM plays a central authority role in such a system and offers a single point of contact with MNOs for service providers such as financial institutions, banks, transit authorities, retailers and others who want to provide NFC enabled payment, ticketing, loyalty services and so on to customers. Also, TSM is able to provide its own Over-The-Air (OTA) platform and business solutions. This allows sending and loading of NFC enabled applications via its own OTA link to the SE and managing the life cycle of the SE at the same time. The TSM’s role becomes important especially in mobile financial service usage cases.

5.2   Over-The-Air (OTA) Technology

OTA is a standard for transmission and reception of applications and application related information through wireless communications media. Using an OTA platform, new services can be introduced and the content of the secure elements (Ses) can be modified in a rapid and cost effective way. The OTA service can be provided by a MNO or another trusted entity, depending on the agreed ecosystem. OTA technology contributes to NFC by making the NFC application management on SEs more flexible and easier.

In terms of NFC technology, the necessary OTA services are activation and deactivation of SEs, remote service management, remote life cycle management of NFC applications on the SEs. With the emerging new NFC enabled services, accommodation and remote management of the applications on the mobile devices has become an important concern. Various associations are intensively working on remote service management (i.e., installation, personalization, update, termination) and remote life cycle management (i.e., card block, unblock, re-issuance, PIN reset, change, parameters update) of SEs via OTA. For example it is possible to lock or remove NFC enabled services on the UICC when it is required to do so for some reason. This is a vital function especially for credit card applications when a mobile has been lost or stolen.


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