The Green Sheet Online Edition
April 26, 2010 • Issue 10:04:02
Memory card-based NFC
According to Dr. Siva Narenda, Chief Technology Officer for Information Technology provider Tyfone Inc., the long-awaited wide-scale deployment of near field communication (NFC)-based payment networks has been stalled not by defects in technology, but by shortcomings in the business model used to foster it.
"NFC hasn't made a lot of headway for two reasons," Narenda said. "One is there aren't enough handsets with NFC and two, even if there were, who takes the fraud liability and who takes the transaction revenue [for NFC-based payments] is unresolved."
With Tyfone's SideTap technology, both issues are resolved, Narenda added. Tyfone is in the early stages of deploying the NFC-enabled payment product. They are partnered with First Data Corp., whose new payment terminals accept SideTap payments, and are seeking out other sales channels with the aim of making the product available to consumers later this year.
Whereas NFC technology is typically embedded in the cell phone SIM card, SideTap - which Narenda said is compatible with any NFC reader on the market - is stored in a cell phone's micro secure digital (MicroSD) memory card.
Different business model
The practical difference, according to Narenda, is that memory cards, and the slots in which they're contained, are built the same way for most mobile handsets, whereas SIM card designs are unique to each phone provider.
Narenda said over 70 percent of smart phones contain memory card slots, and that among those handsets over 90 percent take the exact same type of card. Those are the handsets for which SideTap has been built.
Thus, for financial institutions that sell the product, the cost allocation of liability is theoretically the same regardless of the phone in which it's embedded.
This near universal application of the technology (among smart phone users), Narenda said, is essential to fostering NFC's emergence as a serious payment product because it doesn't require special partnerships or lend itself to monopolies.
"With a SIM-centric solution you may have bank one and carrier two, and they may not work with each other," Narenda said. "It isn't a neutral solution. At the end of the day, the telecom provider, the commerce provider and the bandwidth provider need to be independent of each other.
"The master key for security for a SIM card, generally speaking, is owned by the SIM card issuer, meaning they often have to accept liability for products that leverage that SIM card.
But a mobile operator's balance sheet is not built to take on payment fraud liability. ... All of that goes away with the memory card solution. Everybody does their business the way they would normally do, as opposed to adopting somebody else's business [model]."
The SideTap memory card is essentially a normal MicroSD memory card embedded with over-the-air technology, and it contains everything else that such cards usually do - wallet functions for storing payment cards and other forms of identification, along with the usual functions of the memory card (storage of documents, music, videos, photos et cetera).
The product, Narenda said, has to be purchased outright - consumers cannot download or otherwise retrofit SideTap to an existing memory card. But otherwise the memory card is exactly like a normal one and requires no changes to existing phones.
Tap with SideTap
As with other NFC technology, consumers make payments with SideTap (which works in phones with MicroSD slot on any side - top, left, right, bottom or back) by tapping their mobile devices near NFC-enabled card readers. Narenda said the technology supports PIN and signature payments, and lends itself to a wide array of marketing and loyalty platforms. Indeed, what merchants choose to build off the NFC platform will be limited only by their imaginations, Narenda said.
"The device can communicate, as opposed to a [traditional] wallet where it is passive," Narenda said. "You can envision applications ... that provide couponing services to you in a more streamlined fashion so you don't have to remember to carry the coupon with you or go through tens or hundreds of coupons. It's all automatic - you subscribe to certain things and tap the payment and it all happens at the same time."
Likewise, he added, the payments industry will define the precise security access and control methods used with SideTap, but that "from a technology perspective, [NFC chips] are the most secure information storage known to humankind today."
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