Going walletless and the NFC convergence


Wired magazine contributor Christina Bonnington has bravely committed herself to running a month long experiment in living without a traditional wallet, substituting a smart phone instead for all the functions associated with that familiar object.  That includes not only foregoing payments– neither cash or standard credit cards are permitted– but also identification, transit and coupons. At first sight, this is the type of cutting-edge experiment that could go two ways. In the best case it could become a remarkable exercise in pushing the envelope for existing mobile payments technologies, demonstrating how far one can get to pure digital wallet simply by leveraging options on the market today in creative ways. (Bonnington is armed with an iPhone and Galaxy Nexus capable of running Google Wallet. There are no unreleased/secret apps in the mix that would not be otherwise available to the audience, modulo the usual app  compatibility constraints.)

Or it could become the mobile-payments equivalent of failed Biosphere mission, where a group of scientists locked themselves into a sealed ecosystem that was going to be self-sufficient but eventually had to terminate the mission prematurely as conditions inside deteriorated. There is a risk to running such an experiment too early in the development cycle of a technology, before it has achieved a critical mass of adoption to wean off of competing legacy alternatives. In fairness the setting for this experiment is already optimized for success:  San Francisco boasts a dense urban core, and Bay Area has traditional served as an early-adopter of innovations. A quick check shows plenty of locations accepting pay-with-Square, MasterCard Paypass terminals compatible with Google Wallet (Peet’s Coffee, Walgreens and Whole Foods alone go a long ways) and Level-Up locations, among other popular mobile payment options.

With that in mind, one can optimistically look at other scenarios where smartphones hold the promise of some day replacing and consolidating their traditional equivalents:

  • Transit. From the introductory piece: “My usual modes of transport, San Francisco’s Muni bus lines and BART rail system, require a card. So I’ll be doing more walking, biking, and driving.” In an ideal world she need not give up on BART or Muni. After all both of them use the Clipper card, which is based on MIFARE DESfire technology running over NFC. Mifare emulation is already possible with Android phones, as demonstrated by offer redemption with Google Wallet using  single-tap transactions. There are compatibility issues with current generation of hardware as well as provisioning challenges– how to deliver the transit credentials safely to a phone over-the-air, comparable to handing users a plastic card.
  • Event badging. In this year alone, this blogger attended two conferences where the badges incorporated NFC (BlackHat briefings in Las Vegas, and RSA conference in San Francisco, both using Mifare classic tags) Lest we assume this trend is confined to technology conferences: the three-day music festival Outside Lands at Golden Gate Park used NFC tags for passes. In principle all of these roles can be relegated to the smartphone.
  • Physical access. Another observation from Blackhat: the Aria hotel uses NFC tags for room keys. Again this can be incorporated with Mifare emulation capability in NFC hardware, once the provisioning challenges are solved. That means one day checking into a hotel no longer requires a stop at the reception to pick up keys: credentials to unlock the room are delivered over-the-air to the guests’ smartphone before they arrive. Bonnington also noted in her disclaimers “I will not be ditching my house keys.” While Yale Locks announced a door lock that open via NFC,  hotels are more likely to see adoption of such solutions compared to private residences. The set of individuals with authorized access to a particular apartment or house change rarely. By comparison there is a lot more efficiency gains possible in the hotel industry from improving on the card-key access.
  • Employee badges. Closely related scenario for access to shared-spaces: office buildings. Many of these are transitioning from ancient proprietary 125Khz RFID tags pioneered by HID to more standard solutions running on the NFC frequency. In principle these can be replaced by smartphones as well. Popular card-readers controlling access to doors in office buildings are designed to accept NFC cards. For example many of the HID readers are compatible with the US government PIV standard, which uses standard NFC communication in ISO-7816 mode already supported by existing Andoid hardware.

CP

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