I've got a new vision for eradicating the seam-bursting array of IDs that jams my wallet, and it comes in the form of the ubiquitous wireless communicator that you already can't leave home without—the cell phone.
Like some 70 million fellow Americans, I have a few smart-chip-enabled cards in my wallet. Still, I can't say I've actually taken advantage of this embedded processing power. Instead of a single card partitioned with multiple accounts and secured via biometrics, these smart cards are redundantly magstriped and just adding further bulk to my billfold.
The "chicken/egg" conundrum for smart-card finance applications in the U.S. has been the need for a total retool of our hardware infrastructure. The magstripe and dial-in combination has served us well, but it also adds communications overhead and security vulnerabilities to every transaction. In contrast, the U.K. totally overhauled its infrastructure in the last decade to move from magstripe to chip cards, issuing some 80 million cards and attendant card readers.
Meanwhile, some "standalone" smart-card applications have made headway in the U.S. Access control, transit fare cards, and cell phones with smart-card "subscriber information modules" are all new technology platforms without worries of legacy infrastructure.
But in the decade or so that financial smart cards have been bollixed up with this infrastructure roadblock, we've actually been building a new de facto wireless communications infrastructure: the cell phone. E-commerce can be easily integrated into this wireless world.
Philips Electronics has helped pioneer the Near-Field Communication (NFC) standard, which permits the wireless transfer of data between NFC-enabled cell phones and other wireless devices. It also fully complies with existing contactless smart-card technologies and standards. Philips now has partnered with Sony to build a "ubiquitous open infrastructure" of NFC devices incorporating smart-key and smart-card functions, allowing consumers to use their phones or PDAs for wireless commerce.
Standardized in ISO 18092 and operating in the 13.56-MHz range, NFC is an interface technology for exchanging data between consumer electronic devices at a distance of about 10 cm. As NFC-compliant devices are brought close together, they detect each other and begin to determine how they can interact in terms of transferring data.
Philips and Visa International recently allied to develop contactless chip technology for payment transactions. They're working with a variety of partners to build out applications in gaming, ticketing, music, mass transit, and home shopping. At this year's Consumer Electronics Show, Philips and Visa showcased proof-of-concept demonstrations coupling NFC with Visa's "Verified by Visa" authentication service, setting the stage for NFC's rollout.
In addition to facilitating "cardless" smart-card transactions, cell phones' up-and-coming multimedia capabilities mean the NFC transactions may include purchasing and downloading music, video, and more. Working with Universal Music, Philips previewed a poster incorporating an embedded microchip that sends information about a featured artist and song titles to a customer's PDA or phone. The customer then communicates with a nearby kiosk selling downloadable songs. The kiosk uses NFC technology to capture payment information from the phone or PDA.
Other "proof-of-concept" examples from Philips promise a future where a smart-card-enabled phone may help make your bulging wallet a thing of the past.
Cell-phone users can pay for and store electronic movie tickets. Ticketholders who buy more than one ticket can distribute the tickets to friends' mobile phones using NFC. Visa has introduced a new person-to-person payment concept—no more having to bug your friends to collect on those tickets later!
Smart cards also could be used for airline and hotel check-ins. Hotel cardkey data can be transferred to the traveler's mobile phone. The hotel can transfer a receipt to the traveler's phone upon departure. And once at home, the traveler can transfer the receipt to a PC for expense reporting.
But what about the possibility of theft by RF? The relatively short read range gives consumers control over NFC. The phone adds another level of security over the traditional smart card, as it can be powered on/off or include a passcode or voice biometric code for higher-volume transactions. For applications that require tighter security, chips can be used to store biometric information for identification. Visa has estimated that counterfeiting can be decreased by at least 70% with a switch to smart cards.
Americans are becoming more familiar with RFID. Some 20 million U.S. households enjoy the speed and convenience afforded by RF toll transponders and keyfobs. While the smart cards in my wallet are underused, I use my Speed Pass to pay for gas and my EZ Pass for tolls at every opportunity!