LAS VEGAS Philips Semiconductors and Visa International joined forces at the Consumer Electronics Show (CES) last week to demonstrate contactless payment and connectivity applications based on a Philips-developed technology called near-field communication.
Their goal is to build an infrastructure for universal payment card readers in consumer electronics and mobile telecommunication devices. Philips will embed NFC chips in various consumer devices while Visa provides an authentication service. Under the plan, consumers should be able to download data or pay for digital services through the NFC interface using a contactless card or device with NFC-equipped consumer equipment.
Scott McGregor, president and CEO of Philips Semiconductors, said in an interview at CES, "We'll seek to put NFC [chip] in all the major handsets." Secure universal commerce based on contactless technology "is coming to life, as [NFC-based] goods and services will start rolling out later this year," McGregor said.
NFC technology is capable of reading two different contactless smart card interfaces: Philips-developed Mifare and Sony-developed FeliCa.
Gaylon Howe, Visa's executive vice president of consumer product platforms, said Visa hopes to maintain its presence in "anything to do with payment," whether in a physical or virtual world. Visa hopes to grow its business beyond traditional plastic cards by leveraging the NFC technology.
Once the Visa payment service based on the contactless technology is embedded in mobile handsets, PDAs, set tops, remote controls or TV sets, NFC card readers in theory will become so widespread that consumers will have universal access to Visa's payment service.
In a demonstration here, Philips and Visa along with with Vivendi Universal showed how PDA users could download the right to listen to a song to the device or a Visa payment card either by holding the PDA near a smart poster or by holding his contactless Visa card near a kiosk. The kiosk's "smart poster" used a chip that sends information to the PDA via NFC technology. The kiosk also uses RFID technology to capture payment information from the card.
Contactless payment combined with Visa's verified-by-Visa application aims for easy authentication of consumer data by merchants while making it easier for consumers to purchase digital content. "Many consumers are willing to pay for content and services if it easy to do so," said Philips' McGregor. "We make it easy [for consumers] to play by the rules."
McGregor estimated the cost of embedding the NFC chip into the smart poster, card or device would be "tens of cents." Chip cost varies, however, depending on the level of encryption integrated into the silicon, he added.
Although there have bee many attempts to integrate a smart card reader inside a PC or PC keyboard, they've never succeeded. "The NFC is the first to drive a card reader into a consumer device," solving the persistent problem of a lack of a ubiquitous smart card reader infrastructure in the consumer market, McGregor said.
McGregor said the NFC chip can be embedded inside a handset or its cover, or into a separate SIM card that fits inside a handset.
The NFC, standardized into ISO 18092, operates at 13.56 MHz frequency. It's radio-frequency interface technology exchanges data between consumer electronics devices at a distance of 10 cm. Beyond using a contactless card on a contactless smart card reader, two NFC devices can communicate with each other for data transfer.
The technology can be also used to trigger Bluetooth connections. With two Bluetooth-enabled devices in close proximity, NFC can automatically initialize Bluetooth connectivity. "That's one of the interesting NFC applications," said McGregor. Eliminated is the chore of scrolling through a long menu to identify the device and set up the initial Bluetooth connection.