iPhone 5 NFC snub won't hinder contactless uptake: Datacard

iPhone 5 NFC snub won't hinder contactless uptake: Datacard

Summary: An NFC-enabled iPhone would have done wonders for NFC’s adoption, but it’s not crucial, according to the vendor.


Apple has overlooked near-field communication (NFC) for its new iPhone 5, but it won't stymie the growth of NFC contactless payments, according to Datacard director of mobile solutions business development Sebastien Tormos.

He was speaking at the Mobile and Contactless Payments Australia conference in Sydney today.

Datacard's Sebastien Tormos
Datacard's Sebastien Tormos
(Credit: ZDNet/Spandas Lui)

Pundits previously said that if Apple released an NFC-enabled phone, it would be a giant leap for the adoption of the contactless technology. There was speculation that the iPhone 5 would include the necessary hardware, but those rumours were proven wrong when the phone came out last week.

Datacard deals in payment cards technology for financial institutions, and has been involved with NFC contactless payments for some time.

Local banks have been toying around with NFC for a while, with Westpac recently teaming up with MasterCard to trial NFC payments using Samsung Galaxy S III handsets.

While iPhones still have a large share of the global handset market, Tormos doesn't consider the iPhone 5's lack of support for NFC as a huge barrier for the contactless technology's widespread adoption.

"If we think about the market forces right now, Android smartphones are going extremely strong, and NFC technology has got endorsements from technology vendors," he said. "I'm not too concerned, especially with bridging technologies available."

Those bridging technologies include NFC sleeves for the iPhone 4, with Datacard planning to launch one for the iPhone 5 as well.

Banks have continually issued contactless payment debit and credit cards to consumers. While there is yet to be a widespread adoption of contactless payment methods, the growth rate has been encouraging, and is contributing to the acceptance of NFC as a payment technology, Tormos said.

He sees a future with virtual payment cards that can be loaded instantly on an NFC-enabled phone, with customers able to simply tap their phones on supported terminals to make small purchases. It would also make issuing payment cards to customers easier and faster for banks.

While NFC phone adoption has been growing steadily, most people either still don't have an NFC phone, or do not know how to use one, according to Tormos, and applications also need to support NFC. Commonwealth Bank has yet to enable NFC on its Kaching Android app, because, the bank claims, NFC Android phones don't have the secure element activated.

Westpac has overcome this issue by including a secure element on the SIM cards of the Samsung phones that it is trialling. The problem with this method, Tormos said, is that banks are forced to deal with telco providers that could charge a small fee to issue SIM cards, and may have to involve trusted service managers (TSMs) as a middleman.

Tormos said that implementing a secure element through a microSD card is a more effective way of enabling NFC on phones that do not have those capabilities, but as iPhones do not take memory cards, owners will have to continue with their reliance on NFC sleeves.

Using microSDs to enforce a secure element and enable NFC on smartphones is not new; the technology has existed for some time. But this method of implementing NFC gives banks more control over the payment process, according to Tormos.

He said that banks will need to collaborate with each other in regards to implementing a secure element on microSD cards.

"MicroSD cards won't have room for all different types of secure elements," Tormos said. "You can have 10 virtual cards on a phone with only a few secure elements, so you have to share."

Contactless payment is also tipped to replace the use of cash in the taxi industry, according to Cabcharge.

Topics: Banking, Apple, iPhone, Australia

Spandas Lui

About Spandas Lui

Spandas forayed into tech journalism in 2009 as a fresh university graduate spurring her passion for all things tech. Based in Australia, Spandas covers enterprise and business IT.

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  • Well if the vendor doesn't think it's a problem...

    I'm just kidding, they do have a point; Apple not including the technology yet won't hinder expansion, but expansion was always going to be slow; there's few nfc readers out there at the moment. As I've mentioned before I actually don't dissagree with Apple for not including the technology. The nfc chips are actually neither expensive, power hungry nor taxing to incorperate, after all the beginnings of the tech was in customers hands back in '97. The reason I believe Apple didn't jump in yet is two fold; firstly that the chips don't have much use in the real world yet, and second, they aren't very well tested.

    I don't mean tested as in reliable, rather tested as in security; most current implimentations involve payments, and a company that sells mainly through customer loyalty is unlikely to be the first to jump into a new payment technology.

    Comming back from Apple (as the article says; they are not the majority player in the phone market) I think it's important to remember that actually most people do not have high end smart phones. We may talk endlessly about them because we love them, but with Samsung selling 20m of it's flagship phone first quarter, they still aren't everywhere. Even for those that do have them NFC is limited. For now we have the tech and not much to do with it. Even with the bank cards, I'm routinely stuck in ques behind people that, when presented with a chip reader, ask if the vendor doesn't have the "touchpad thingy".

    Aside from paymets, which I am skeptical about, but I'll come back to, I don't think the technology is being fully explord yet. It has a great many non payment possibilitys for apps; particularly multiplayer games and social apps, and I really think we are in the infancy of this tech. Remember when QR was the in thing and was everywhere (not that it isn't still popular), I foresee these imimentations as being key; off the top of my head, NFC could be used in conjunction with a museum app to replace those irritating headsets for museum tours, ticket collection at the cinema or sporting events, assisting visually impaired shoppers at the supermarket, etc. plus, you know, the usual advertising possibilities (I'll never forget the first time I turned on bluetooth to share a photo in a mall food court and was instantly offered an ad from the mall)

    As for payments; I'm not against them, but their are limitations. Firstly that it seems that banks are looking to add security or authorisation to their apps - security is good, but authorisation would really defeat the point. Additionally, with smartphone theft growth massively outstripping that of card theft, and banking fraud exploding, how many eggs do we want in one basket? This is unlikely to affect me as I routinely root and jailbreak my non business devices, so banking apps don't work anyway, but I'd definitely advise a little caution surrounding contactless payment for now.
  • why?

    mobile paymet is a trend.

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