The trial, which begins Sep. 1 this year, will involve 40 participants from the public who can register to be part of the pilot at Taipei Smart Card corporation's Web site.
Philips is also working with electronics and telecommunication players under Taiwan's Proximity Mobile Transaction Service Alliance, to implement a contactless NFC interface in the country's retail and banking environments. The Alliance is an initiative of the Ministry of Economic Affair's Committee of Communication Industry Development.
NFC is a contactless technology jointly developed by Philips and Sony, and is endorsed by global standards bodies such as the ISO. Over 40 companies from various industries are members of the NFC Forum, established to drive future developments of the technology.
Calling NFC the "next big thing", the company's Singapore's chairman and CEO Mourad Mankarios said NFC technology, which combines identification technology with communication and security, will "open up a whole new world of possibilities for innovative applications" via electronic devices.
Mankarios added that apart from financial applications being secure, the NFC's operating range of 10 to 20 centimeters made it difficult for other people to abuse the technology.
ABI Research has also pointed to a growing use of the technology in mobile phones. By 2009, the market analyst estimates, 30 percent of the 850 million new mobile phones shipped worldwide will be NFC-enabled.
According to Arthur Pok, Philips Singapore's sales and marketing director for identification, NFC embedded in electronic devices such as mobile phones and home entertainment systems, can act as a smartcard token and enable peer-to-peer data transfer, enabling devices to "talk" to each other.
For example, a businessman making an overseas trip can book his flight and hotel room via his mobile phone and use it at the airport to print out his boarding pass. He can also check in using a device embedded with an NFC chip, and transfer a "key" to his mobile phone which he can use to access his hotel room.
Philips launched its first pilot project earlier this year, using the Nokia 3220 mobile phone, in the form of a ticket-payment system for the bus transportation in Hanau, Germany. Pok added that the electronics giant is currently working on several NFC-related projects worldwide, such as mobile payment, event ticketing and smart media for entertainment content.
The company has also partnered two universities in Singapore to develop NFC applications and further drive the penetration of touch-based technologies in the region. It unveiled an industry mentorship program with Nanyang Technological University and the National University of Singapore to boost innovation in this technology segment. The program is the first in Asia for the company, which has similar collaborations with three universities in Europe.
Under the initiative, engineers from Philips Singapore will guide 28 final-year engineering students--14 from each university--over the next 12 months, in understanding and developing NFC applications in areas such as healthcare, e-commerce and on-campus use.
On top of providing NFC-related support and resources such as software, NFC-enabled mobile phones and chip solutions, the company intends to commit S$46,000 (US$27,223) as upfront investment.
But while NFC is a "well-established technology which has been used for many years with high reliability", it has one limitation, according to Robin Simpson, Gartner's research director for mobile and wireless. He noted that the short-distance operating range made it necessary for an NFC device to be within 20 centimeters of the reader.
Simpson added that security should be carefully looked at in projects involving the NFC technology, which he said should not be used in isolation and should instead be deployed with "multi-factor authentication".
To ensure the payment is secure, a second factor such as passwords or PIN numbers, should be deployed together with the NFC smartcard or device. In some cases, he added, a third factor such as authentication via biometric technology, is also required.
"All three [factors] must be present for a secure transaction to take place," Simpson said. "Thus there is little risk if the phone is lost or stolen--unless the person loses their thumb and their password at the same time."
Other dynamics also come into play with deploying NFC. "The real challenges are in designing the applications so that they bring true convenience to the user--faster, easier transactions with fewer steps and less human intervention," he said.
Philips' Mankarios said the company is not ruling out the possibility of incorporating biometrics into its NFC-enabled devices.