Sunday, February 20, 2011

Web-surfing Performance is a “Must Have” for Today’s Smartphones



Smartphone download and upload speeds are becoming more important as Internet gaming, graphic rich apps, and multitasking are further enabled by improvements in Smartphone technology. The latest Smartphones have both 3G (and/or 4G) cellular and Wi-Fi technologies, but the rated speed of the cellular (or even Wi-Fi) technology doesn’t necessarily indicate that your handset will perform as expected – download and render a website to its screen similar to a laptop – which is the ultimate handset user experience. This performance requirement goes beyond just rendering a website, it bleeds over into time critical applications such as online gaming.

Several factors influence the Smartphone’s download (DL) and upload (UL) speeds as well as its rendering to the screen:
1) cellular technology (3G or 4G)
2) available bandwidth
3) website complexity and size
4) traffic to that website and its server’s ability to deliver content
5) the internal hardware capability

The entire link between Cloud-based content and a Smartphone’s display is primarily influenced by the above five (5) factors and affects Web-surfing as well as online gaming. Performance expectations along with novel uses of the Smartphone are continuing to grow as new phones are released. In addition, Smartphone capabilities have improved at an increased rate this past year (2010), as seen by releases and announcements of 4G (WiMAX and LTE) technologies, A9 dual-core processors, video encoder/decoder that supports 30fps video playback, etc. What other applications can a Smartphone be used for other than to communicate directly with the Cloud for Web-surfing and online gaming?

Although not a new idea, the Smartphone can be used as a Mobile Hot Spot, thereby allowing a person with a laptop to Web-surf remotely – an indirect use for Web-surfing. Yet to make this a desirable user experience the Mobile Hot Spot should perform similar to a Wi-Fi connection at home or the local cafĂ©; a performance short-fall, until recent Smartphone entrants. Whether a website is rendered to the Smartphone’s display, or to a Laptop’s display when used as a Mobile Hot Spot, the entire system from website to the device’s screen makes an impact on the performance and the user experience.

“Mobile Hot Spot” Performance Testing
Most Smartphone’s offering the Mobile Hot Spot feature can connect up to five (5) laptops or any portable device that has Wi-Fi technology. Laptop Mag (laptopmag.com) conducted a series of tests using some of the latest Smartphones that are Mobile Hot Spot enabled. The Mobile Hot Spot feature uses the phone’s cellular (data) network to connect to the Cloud, while using its Wi-Fi to connect to a laptop’s Wi-Fi, acting as a bridge or “pipe” for the laptop, see Figure 1.

 
Source: Imagines taken from Internet

Figure 1 – Smartphone used as “Mobile Hot Spot”


The test by Laptop Mag to determine the Best Mobile Hotspot Smart Phone took place this past September (i.e. Sept 2010). The results are summarized in a matrix in Figure 2 of download (DL) and upload (UL) speeds and Web-surfing times, in seconds. The testing used a Toshiba Satellite A665 notebook as the Wi-Fi connected test device, several Smartphones acting as the Mobile Hot Spot, and SpeedTest app on the notebook to test the DL/UL connection speeds through each Smarpthone. For the 3G/4G Smartphones data matrix in Figure 2, the number on the left side in the cell is the 3G time (in seconds), and the right side is the 4G time (in seconds). The DL/UL speeds for the HTC Droid, HTC Evo 4G and Samsung Epic 4G are comparable to speeds achieved with “average” home connected cable technology available today.



Figure 2 – Results of Laptop Mag’s Download and Upload Testing, Mobile Hot Spot


The testing was conducted in New York City but used only Verizon and Sprint networks because these carriers only had phones with Mobile Hot Spot functionality. AT&T and T-Mobile will soon offer phones with Mobile Hot Spot functionality, however.

An overview of the testing is available on the Laptop Mag’s blog. The data in Figure 2 shows that the DL/UL speeds and rendering times to the Laptop’s screen produce a desirable Web-surfing user experience, but the blog write-up doesn’t describe the details that can affect the DL/UL speeds; for example, the amount of activity on the website during the time of testing, which can slow a server’s response; or multiple Laptops using a single Smartphone that divide up the available bandwidth, reducing the DL speed and increasing the time to download. Also, the size (in kilo-bytes) and complexity (e.g. flash) of the website can affect the download response.

All these websites have different sizes and complexities that change throughout the day, week, etc. For instance, the download time of the Laptop Mag’s website versus NY Times’ website (see Figure 2) suggests that Laptop Mag’s website has twice the amount of content to download, which may not be the case. However, Laptop Mag’s article does describe and examine the innovative use of the Smartphone as a “pipe” to link a Laptop to the Cloud using cellular + Wi-Fi technologies, i.e. turning the Smartphone into a Mobile Hot Spot. I recently took Laptop Mag’s testing to the next level to better understand and pinpoint the potential bottlenecks of the Smartphone and Cloud link that slow the rendering of a website on the handset’s screen – is it the cellular (data) network or the handset’s internal hardware?


Additional Data Gathered
Since Laptop Mag already provided data using the Smartphone as the connectivity pipe, I wanted to first test the Web-surfing experience without the Smartphone – using a (Ethernet) connected Desktop/PC and a Wi-Fi connected Laptop, to a modem connected via cable to the Internet. Second, I tested a (standalone) Smartphone’s cellular (data) connection and then its Wi-Fi connection (in separate tests). This additional data helped to understand and differentiate the user experience between downloading and Web-surfing through the Smartphone (using it as a Mobile Hot Spot) and downloading and Web-surfing to the Smartphone (using Wi-Fi, 3G and 4G technologies).

In addition to using Speedtest.net’s software tool, which provided DL/UL speeds and ping times, I used Pingdom.com’s software tool to gain further information about the website, such as the size of each website and the download time for each object (e.g. images, CSS, JavaScripts, RSS, Flash and frames/iframes) within the website. The test results are shown in Figure 3.


Figure 3 – DL/UL Test Results for Desktop/PC and Laptop, non-Mobile Hot Spot

Note:
1 - Used tool from Pingdom.com. Sends out ping packets and provides network response times
     a. Times of less than 50 milli-secs are considered “fast” response times
2 - Rendered full website on screen
3 - Connected to server in Palo Alto, CA
4 - Connected to server in Wichita, KS


Several tests were taken for each case and the average provided, with the Samsung Intrepid in 3G (CDMA) mode having a much greater variation in DL/UL speeds, see Figure 3. Also, the number reported within the matrix cell on the left side is the Pingdom.com test time, and the number on the right side in the same cell is the download and rendering test time, both in seconds. For example, for the Desktop/PC test case and for the espn.go.com website, which was 1,025k bytes and 31 objects, it downloaded in 2.9 seconds using the Pingdom.com tool, and downloaded and rendered (in real-time) on the Desktop/PC screen in 4.2 seconds. In comparison, the Samsung Intrepid/Wi-Fi test case downloaded espn.go.com in 4.3. seconds using the Pingdom.com tool,  and downloaded and rendered (in real-time) on the handset’s screen in 45 seconds – a bottleneck?

A noteworthy outcome of the testing was the rendering of the website to the Samsung Intrepid’s screen in both 3G (CDMA) and Wi-Fi modes, which took a long time (in comparison) and translated to a poor user experience. Although the varying bandwidth in 3G (CDMA) mode could be the part of the cause for the slower download speed, rendering to the screen is significantly affected by the handset’s internal hardware design and this affects performance as well. The download and rendering times for the Samsung Intrepid using either the 3G (CDMA) or Wi-Fi connection were almost the same (~45 seconds), which points to the internal hardware design as the bottleneck. This is most apparent when compared to other (newer) Smartphone’s in Figure 2, which rendered the website to the Laptop’s screen quickly (in less than ~10 seconds) using either 3G (CDMA) or 4G (WiMAX) technologies.
                                             
To further understand and compare the performance of the new 3G and 4G phones with the Samsung Intrepid data, I then tested the HTC Evo 4G phone in both 4G (WiMAX) and Wi-Fi modes (same phone tested in Laptop Mag’s testing), and tested the HTC Hero phone in both 3G (CDMA) and Wi-Fi modes. The results of the data gathered are shown in Figure 4.


 Figure 4 – HTC Evo 4G in 4G/Wi-Fi modes and HTC Hero in 3G/Wi-Fi modes, to handset

Note:
1 - Used tool from Pingdom.com. Sends out ping packets and provides network response times
     a. Times of less than 50 milli-secs are “fast” response times
2 - Connected to server in Palo Alto, CA
3 - Connected to server in Los Angeles, CA
4 - Mobile website version was downloaded


The numbers in Figure 4 included downloading each website to the Smartphone and rendering it to its screen. The Pingdom.com tool was not used for supplementary testing since it became apparent in the previous testing results (in Figure 3) that this tool provides information about the website’s objects and download time only to the Smartphone, and was consistently faster than downloading and rendering to the Smartphone’s screen. The testing results in Figures 2 thru 4 provided additional insight into various connectivity uses of the Smartphone and its performance regarding Web-surfing. The connectivity uses can be summarized into three basic categories:

A.     Smartphone using its “Mobile Hot Spot” functionality – Wi-Fi + 3G/4G
B.     Smartphone using its Wi-Fi technology
C.     Smartphone using its cellular (3G/4G) technologies

The data in Figure 4 clearly shows the 4G (WiMAX) network downlink performance (at 9.5 Mbits/secs) surpasses the 3G (CDMA) network (at ~0.4 to ~0.9 Mbits/secs) and Wi-Fi connection (at ~3.8 Mbits/secs). The ping test varied between technologies and the ping performance provided better results when the Smartphones were connected via Wi-Fi to the network, at ~117 milli-seconds. The faster the ping response, the better the network response is for time critical applications. The ping tests for Smartphone-Wi-Fi and cellular cases, however, were not as fast as the Desktop/PC-Ethernet and Laptop-Wi-Fi tests, which were on the order of ~30 milli-seconds (see Figure 3).

The Web browsers for the newer Smartphones detected espn.go.com and nytimes.com websites’ mobile versions, and these mobile versions reduced the download times significantly, as seen in Figure 4. In fact, from the testing I was able to conclude that the 3G (CDMA) network with a sustained minimum downlink of ~0.7 Mbits/sec (and an uplink of 0.15 Mbits/sec), would have just enough bandwidth to download the larger and more complex websites, while providing a good user experience. The only anomaly I came across was the downloading and rendering of the Laptop Mag website (which didn’t have a mobile version), and that took ~37 seconds using the 3G (CDMA) network This longer time (i.e. slower download speed) may have been caused by a slow 3G downlink speed at the time of testing, which I found varied often during testing.

With data in hand and looking back at the five (5) criteria that can influence Web-surfing using a Smartphone, the DL/UL speeds and rendering of the website to a Smartphone’s screen is well understood. The difference in cellular (data) technology, 3G vs. 4G, can make a performance impact, especially since the 3G technology’s bandwidth varied considerably throughout the testing, bandwidth limiting the connection and affecting the download times; however, the 3G download speeds in Laptop Mag’s testing are several hundred to a mega-byte higher than my testing, which makes a difference regarding the time to download and render content to the Laptop’s screen. Yet it was determined that a certain sustained minimum bandwidth on a 3G network could still produce a good user experience for Web-surfing on the Smartphone. In addition, mobile versions of the websites enabled faster download times for the newer Smartphones, thus providing a very good 3G (CDMA) experience.

Traffic to the website and the website’s server ability to deliver content wasn’t directly tested but the websites were tested during the day, evening and weekend, and found little difference in performance (when 3G bandwidth limiting wasn’t an issue!). The performance of the newer Smartphone’s compared more closely to a wired Desktop or Wi-Fi connected Laptop, thus “a sign” of closing the performance gap between portable and mobile devices.

The quick display (i.e. render) of content on the Smartphone’s screen is a salient feature that users are becoming accustomed to with improvements in technology. There are fundamental (wired vs. wireless) network limitations as noted in the testing, but the quick rendering of text and media (for Web-surfing and online gaming) is necessary for all new Smartphones released in the future, thus continuing to “raise the bar”. Besides the cellular (data) network limitation, it was determined that the bottleneck which limits the rate of rendering is affected by the Smartphone’s internal hardware design.


A Look At The Internal Hardware Design
The movement of data (in bits or bytes) from its wireless connection through the phone’s connected hardware and to the display depends on the hardware, inter-connectivity, and related software/firmware. See Figure 5 for a general diagram of a Smartphone’s internal hardware connectivity.


Source: Imagines taken from Internet

Figure 5 – Exploded View: General Internal Hardware Connectivity of a Smartphone


There are a number of factors as mentioned within the Smartphone’s design that affects the final display (or rendering) as the bits move from the cellular or Wi-Fi hardware to the screen. The following matrix, see Figure 6, shows the application processors and GPUs for each of the Smartphones used in the Laptop Mag’s and my testings.


Figure 6 – Matrix of Smartphones, the OS, and Apps Processors and GPUs


The high-end Smartphones that contain the latest application processors and GPUs will provide a better Web-surfing experience, as noted in the testing results. Qualcomm’s Scorpion and Snapdragon platforms, as well as Samsung’s Hummingbird and TI’s OMAP platforms, are in the Smartphones tested. These platforms not only improve the rendering time of a webpage, but enable better gaming experience and high-definition (HD) video decode and playback. A comparison of these three processors is available at PhoneArena.com. Other competitors offering high-performance application processor and/or GPU products include: Nvidia’s Tegra/2 platforms, Freescale’s i.MX multimedia applications processors and ST-Ericsson’s NovaThor platform.

Qualcomm’s GPU – Adreno platform – can process 32M triangles/sec (Adreno205) and 22M triangles/secs (Adreno200), enabling quick processing of rich graphic content. “Triangles per second” is one measure of a GPUs graphic computing power. The PowerVR used in the other Smarphones tested doesn’t have the same “triangle” computation spec/capabilities as the Adreno, but visually (i.e. empirically) produced similar rendering results. From my testing, the HTC Evo 4G had superior Web-surfing performance versus the competition. However, an article by Digital Trends mentions that the Samsung Epic 4G produced better graphics performance for gaming tests (Epic 4G: 55.1 fps, frames per second vs. Evo 4G: 42.9 fps) and Neocore benchmarking than the HTC Evo 4G, yet the sum total of all areas tested gave the HTC Evo 4G the “win”.

As determined through testing, both the cellular (data) connection speed and application processor/GPU performance contributed to bottlenecks that limited the content rendering to the handset’s screen. Gray areas exist with even the newer Smartphones that prevent a consistent high-level user experience for Web-surfing. These gray areas include: varying 3G cellular connectivity speed and the application processor design (which includes the GPU). Further improvements in the application processor and GPU performance will bring near-Laptop performance levels to newer Smartphones in the future. Newer 3G technologies, such as HSPA or HSPA+ will reduce the probability that your cellular (data) connection will throttle-back to an undesirable level, as can happen in densely populated or high-use areas.

Minimum sustained speeds could be imposed by the carriers but that may also block other users from data network access, creating an even worse experience – no network access – or “minutes” to download a complex website. Higher data rate cellular technologies, i.e. 4G – WiMAX and LTE, that are becoming available in the newer Smartphones will “open the pipe” to further accommodate data network traffic. Motorola’s announcement at CES 2011 of their Atrix 4G Smartphone is a performance monster. Due to be released in March 2011, it uses an Nvidia Tegra 2 dual core processor (Dual-Core 1GHz Cortex A9 + GeForce ULP), cellular technology – HSDPA (category 10 @ 14.4 Mbps), and has Wi-Fi (802.11 a/b/g/n – 2.4 and 5 GHz band technologies), amongst other technology upgrades relative to the devices tested in this article. HSDPA category 10 isn’t considered 4G technology but offers significantly more bandwidth (and nearly 4G speeds). The additional cellular data speed and the Nvidia Tegra 2 processor will make for a superior Web-surfing experience as well as online gaming experience using the Atrix 4G.


Perspective
As mobile users continue to utilize their Smartphones for Cloud connectivity, the demand for improved Web-surfing will grow. Most websites in the Cloud have sizes that range from 40 kbytes to 1,500 kbytes in size and contain 6 to 140 objects. Larger websites can be demanding for Smartphones, thus providing an average user experience, where as a wired or wireless Laptop performance sets the benchmark for Smartphones to achieve.

Mobile website versions do make the Web-surfing experience “better” for a Smarpthone, especially when data network speed limitations come into play. Once the data network limitations are minimized, then the Smartphones’ internal hardware design becomes the potential bottleneck to render the full website on the display in a time that meets the user’s expectation.

From the testing conducted, Desktop/PC-wired and Laptop-wireless downloaded and rendered websites in less than 7 seconds, thus establishing a target for Smartphones to achieve. Most websites were rendered within 10 seconds on the newer Smartphones. My testing of the Samsung Evo 4G in WiMAX (4G mode) took about 15 seconds to render with no network limitations (where as Laptop Mag showed less than 5 seconds to render on the Laptop’s screen).

My user experience was still very good since I could scroll around on the screen with my finger to view content as it downloaded. My experience with the HTC Hero was good, but Laptop Mag’s website took about 37 seconds to fully download; however, I could still scroll around the screen with my finger to view the content as it downloaded. The Samsung Intrepid was an agonizing experience and lacked flexibility to maneuver on the screen to view content.

The up-and-coming Smartphones – such as the Motorola Atrix 4G and others to follow in 2011 – will have the higher performance, and there is much anticipation to see if they provide a wired-like experience that accommodates the demands by the gaming enthusiast and multi-taskers, prosumers, and Gen-X and Gen-Yers.

Smartphone or Tablet, together with compelling features (e.g. Mobile Hot Spot functionality) and offered at an array of prices, does make a consumer wonder what Cloud-accessible devices will the industry start to consolidate towards in the near future. And does the consumer want to always wait two (2) years before they buy a new Smartphone or will the carriers consider new contracts to allow yearly upgrades by the consumer so they can take advantage of the newer technology, sooner?

I own a Desktop, Laptop and two Smartphones – but I would probably reduce this to just two devices if the user experience for 1) performance was high, 2) roaming was seamless and with low/no roaming charges, and 3) cross-device synchronization of content and PIM (personal information management) was easy and effortless. Let’s see what the next eighteen (18) months brings.



Monday, February 7, 2011

Contactless Mobile Payments Set for 2012


Dan Butcher from Mobile Commerce Daily just published a very good article on contactless mobile payments, click here.  He briefly discusses the ISIS initiative as well as Europe’s launch this summer with a partnership between Orange, Everything Everywhere, Barclaycard, MasterCard and Gemalto.

Take-aways from the article include:
•         The launch proposition will focus on an industry-backed, SIM-based approach to payments with the goal of enhancing security for customers.
•         Gemalto will take on the TSM (Trusted Service Management) operated services role, offer NFC SIM cards with a payment application, and provide a user interface on the handset.
•         NFC applications role out in the UK are structured around the following use cases: NFC payment and transport, loyalty and couponing programs.

At the end of the article there is a video to view on mobile financial services offering by Gemalto.

Monday, January 24, 2011

NFC and the Mobile Payment Initiative-Part 6 of 6



[Part 6]
Perspective

The credit card companies – MasterCard, Visa, and Europay (originally know as: EMV) as well as American Express and Diners Club – and their early involvement with smart cards to create its specification, have helped to guide the way for contactless payments. EMVCo was established to oversee long-term maintenance and compatible of the system. With the exception of countries such as the United States, EMV-compliant cards and equipment are global. Today, a country's national payment association, in coordination with MasterCard, Visa, American Express and JCB (formerly Japan Credit Bureau), jointly plan and implement EMV systems.

Contactless payment terminals are increasingly available at merchant locations (e.g. McDonald’s, company cafeterias), transit ticketing (e.g. train and bus terminals) and unattended locations (e.g. vending machines). Payment terminal manufacturers are seeing an increase in the rate of contactless terminal sales (e.g. high-end terminals that have displays with in-store personalized mobile marketing capabilities), while credit card companies are seeing an increase in use of contactless cards and alternative devices (e.g. key fobs).

Carriers who have rolled out mobile contactless proximity payment trials to date have clearly benefited from the ability to leverage the contactless infrastructure that already exists in many regions of the world, due to the success of contactless payment deployments which utilized a variety of form factors, including cards and attachable /programmable stickers.

Handset manufacturers are beginning to recognize the value proposition of NFC-enabled phones and are introducing many Smartphones with NFC beginning in 2011. The ISIS JV (a trademark of JVL Ventures, LLC) has been formed to deliver/launch a mobile payment system in North America into key geographic markets over the next 15 to 18 months. Europe and other regions (globally) have rolled out their mobile payments system and are beginning to upgrade (e.g. Japan), or are completing trials and will offer mobile payments soon.

In addition to the confluence of available/usable contactless payment technologies and stakeholders collaborating with a common interest both with trials and actual deployments, the various factors driving the business case to include NFC technology in mobile devices can be summarized:

•         The ubiquity of the mobile phone, and more specifically, the Smartphone
•         The capacity for extended functionality of the handset now that more Smartphones are in the hands of consumers and prosumers
•         The continued increase in the number of contactless cards and contactless payment terminals
•         The continued increase in the use of mobile phones for transactions, e.g. SMS
•         Carriers, banks, credit card processing companies and handset manufacturers in North America have realized that now is the time to combine forces and drive the ecosystem for mobile payments
•         Additional revenue can be gained through OTA provisioning and eWallet advertising


For the consumer and prosumer, mobile payments have a compelling value proposition – secure payments, flexibility and convenience. However, “mobile payments” isn’t for everybody and consumers that find “change” difficult, will less likely integrate this technology into their lives.

Purchasers of goods and services that have a Smartphone (or other advanced mobile technology), would be more inclined to utilize this payment vehicle since these Smartphone owners usually are Innovators, Early Adopters and Early Majority (as described by marketing terminology). The product diffusion curve in Figure 9 depicts the penetration of a product as a percentage of people. People are defined as: those who own and use (even if it’s only on occasion) a “cell phone”; and Smartphone is a category within cell phones.

As time advances so does the penetration of a (new) product or technology as more people use it. The curve can be used as an illustration for personality types that would have a greater (and lesser) tendency to use (i.e. buy and implement in their life style) the product: greater tendency – Innovators, and lesser tendency – Laggards.

Moreover, not all Innovators who embrace a new product, e.g. a Smartphone, would be equally as quick to embrace a new technology subset of that product, e.g. mobile payments using NFC technology. In other words, a portion of Early Adopters may be Innovators or Early Majority when it comes to actually using their Smartphone’s NFC technology for mobile payments; which is example of NFC utilization and enablement (as earlier described) as a percentage of subscribers.


Source: MindTools website

Figure 9 – Product Diffusion Curve

There are a myriad of papers written on the psychology of habit adoption, but a study conducted by the Boston Federal Reserve in 2007 on Consumer Behavior and Payment Choice may provide some insight into barriers as well as decisions behind adoption. This study used employees of the Fed, so the results in terms of percentages may be more conservative in comparison to the general population. However, the reasons and thoughts behind the choices for using cash, checks, debit or credit cards to paid bills or buy goods does have validity. A couple of interesting facts include:

•         Cost, convenience, and timing are the three most important fundamental characteristics that determine consumers’ adoption and use of a payment method
•         Safety and privacy also are important as they relate to susceptibility / consequences of identity theft
•         Payment method; as most consumers use a variety of payment methods each month for each type of bill
•         Payment choice is a joint decision (between couples)

When consumers switched from checks to other payment methods, the method they chose depended on the location and amount of the payment, among other things.

1.      For payment amounts below $20 (also called micro payments), 51% used cash
2.      For medium-sized payments ($20–50), 46% used debit cards
3.      For large payments (amounts above $50), 48% used credit cards

The study further discusses as to why respondents change payment methods:
•         About 37% of respondents reported that convenience and various elements of cost were the primary influences on their decisions to substitute electronic payments for check
•         18% of responses stated that cost (i.e. saving money on checks) was a factor
•         13% of responses indicated that better recordkeeping was a factor in respondents’ switching (from checks to debit cards)
•         Almost one-third (~33%) of responses indicated that use of debit cards increased because more stores accepted them than previously

This last sentence can also describe why and how barriers could have been lowered earlier – by implementing electronic payment terminals at the retail stores. More specifically, if merchants installed only NFC-enabled terminals with mag-stripe capabilities and credit card companies issued more contactless credit/debit cards, then this push mechanism could drive consumers to transition their payment habits more quickly, thus penetrating the product diffusion curve faster. (Personally, I don’t recall ever being asked by my credit card companies if I wanted a contactless-enabled credit or debit card.) Once NFC-enabled phones become readily-available, consumers will have other payment options then to use a contactless terminal for a transaction.

Two NFC-enabled phones using the peer-to-peer mode – one in Active (or Reader) mode and the other in Passive (or Tag) mode – can transact with each other without the need for a contactless terminal as the point of interaction (POI). This can open the market for new types of transacting that bypass the present contactless terminal system. Virtual and mobile merchants, for example, would be able to offer discounts, their own loyalty cards and accept payments – phone to phone – using the OTA provisioning to finalize the transaction.

In addition, a user could pay their bills from their eWallet, transfer funds from saving to checking, transfer balances from credit card to credit card, and transfer funds to a relative across the country – rather than using Western Union! The one-to-one transaction feature could further motivate the phone owner to start using mobile payments as a vehicle for making financial transactions. Whether the transaction is made peer-to-peer or through a contactless terminal, it’s safe and secure. Mobile payments security, and the capability of preventing someone from hacking or accessing your eWallet information, is greater than with a credit card or check book.

OTA “remote access” software used by companies on employee’s laptops to access it and lock out a third-party from retrieving the files is similar in capability as the software used on a company-issued mobile phone. This security software capability is presently available and is used to secure the eWallet, creating several barriers to access.

If your mobile phone is lost or stolen, a PIN number (i.e. barrier #1) prevents a third-party from accessing your eWallet. “Three tries and you’re out” feature (barrier #2) could also be included as a means to lock down the eWallet when the PIN is incorrectly entered. As biometrics becomes more available and reliable, a fingerprint scan, iris scan or retinal scan (barrier #3) can be also used to prevent unwanted access to your eWallet.  Further, OTA provisioning will give the mobile phone owner the ability to send an SMS or go online and enter a “remote swipe” code (barrier #4). This code can be sent to the handset via the cellular network and/or Internet (accessible via Wi-Fi), so when the mobile phone is “on” all eWallet data will be automatically deleted or “cleaned” from it. Whether the phone is “on” or “off”, however, and the battery or SIM is attempted to be removed, a “local swipe” to the eWallet can be automatically executed (barrier #5), thwarting the intruder.

Since all information is backed up automatically to an off-phone or cloud-based storage, when you buy a new mobile phone or find the old one, the eWallet information can be re-downloaded to the phone through OTA provisioning. With all Smartphones having built-in GPS, apps exist (see AptoLink) that can run in the background and can track (and upload) its location so a lost or stolen phone can be quickly traced. This functionality may be the first line of defense, since many phones are merely “temporarily lost” or misplaced. GPS can be used for more than just tracking a phone’s location.

GPS will become more valuable, however, as a tool for location-based services (LBS), primarily advertising to the handset with information that is geo-based and habit-based. With the understanding of a person’s buying habits that are based on location/day/time-of-day, over time an efficient notification, advertising and coupon offering can be provided without spamming. This functionality is a complement to mobile payments – by assisting a phone owner to make a purchase based on location and habit, then using your handset to complete the financial transaction, wirelessly.

NFC mobile payment technology is safe and secure for consumers to use whether it’s finding the phone’s location (lost or stolen), having remote access to delete all eWallet data, or efficient advertising based on location/habit-based activities. Some additional thoughts on moving the consumer towards adopting NFC technology include:

1.      Make the process simple, secure and effortless
2.      Do the work for the handset owner – don’t ask the handset owner to fill out streams of paper work and re-enter all credit, debit and loyalty card information
3.      Prefill-out the phone owner’s confidential information and have them OK a simple and concise “list” online
4.      Securely provision their information in a way that the phone owner only has to accept each digital application (with the prefilled-out information) on their eWallet
5.      Simple editing should be available on the eWallet if previously reviewed information online isn’t fully accurate or needs to be updated on-the-fly

NFC-enabled mobile payment has the financial infrastructure in place. Stakeholders have conducted trials globally for a number of years and are now moving forward and pulling together complementary partnerships. Japan is a testimony of a country already using mobile payments, a model to learn from. As more consumers and prosumers become aware of (and use) mobile payment technology, it will also profoundly affect and revolutionize the financial transactions industry.


References

A – Mobile Payment - Advanced Technologies (NFC), Strategies And Future Of Remote & Proximity Payment In U.S., Aug 26, 2010, http://www.pymnts.com/research-and-markets-mobile-payment---advanced-technologies-nfc-strategies-and-future-of-remote--proximity-payment-in-us-20100816005641/

B – Nokia, Philips and Sony establish the Near Field Communication (NFC) Forum, http://www.nxp.com/news/content/file_1053.html

C – Radio Frequency Identification Technology History, http://en.wikipedia.org/wiki/Radio-frequency_identification

D – Smart Card Technology History, http://www.smartcardalliance.org/

E – Smart Card History, http://en.wikipedia.org/wiki/Smart_card


G – Mobile Wallet Users Forecast To Reach 800 Million in 2015
Date: 29 June 2010, http://imsresearch.com/news-events/press-template.php?pr_id=1474&cat_id=169&from

H - Cingular Starts NFC Trials in the USA, http://www.geekzone.co.nz/content.asp?contentid=5601

I – Trains and burgers: Sprint launching NFC trial in Bay Area, http://mobile.engadget.com/2007/12/21/trains-and-burgers-sprint-launching-nfc-trial-in-bay-area/

J – Digital Wallets at the Ready in NYC for Visa's Latest Trials, http://gizmodo.com/5617754/digital-wallets-at-the-ready-in-nyc-for-visas-latest-trials

K – Proximity Mobile Payments: Leveraging NFC and the Contactless Financial Payments Infrastructure, http://www.sunildewan.com/uploads/Proximity_Mobile_Payments_Leveraging_NFC_and_Contactless_Financial.pdf

Tuesday, January 18, 2011

NFC and the Mobile Payment Initiative-5



[Part 5]
NFC Solution for the Mobile Phone

The NFC Forum and other alliances, organizations and standards bodies have been influential in laying the ground work for NFC technology. NFC technology is based on RFID technology standard and specifications. It communicates via magnetic field induction and uses an antenna to transmit the information. It operates within the globally available and unlicensed radio frequency ISM band of 13.56 MHz with a bandwidth (BW) of 14 kHz.

Other specification features include:
•         Communications range: up to 20 cm
•         Data rates: 106, 212, 424 and 848 kbits/s
•         Two modes of operation:
-          Passive: The Initiator device (such as a payment terminal) provides a carrier field to the Target device (such as a NFC chip in a handset or contactless card). In this mode, the Target device “may” draw its operating power from the Initiator’s electromagnetic field, thus allowing the Target device to work in a low battery condition mode.
-          Active: Both Initiator and Target device communicate by alternately generating their own fields. A device deactivates its electromagnetic field while it is waiting for data. In this mode, both devices typically need to have a power supply.
•         NFC devices are able to receive and transmit data at the same time. Thus, they can check for potential collisions if the received signal frequency does not match with the transmitted signal’s frequency.

Standards and compatibilities include:
Air interfaces:
•         ISO/IEC 18092 / ECMA-340 - NFC Interface and Protocol-1 (NFCIP-1)
•         ISO/IEC 21481 / ECMA-352 - NFC Interface and Protocol-2 (NFCIP-2)
•         ISO/IEC 15693 - forms part of a series of International Standards that specify a contactless smart card

Other technical/communications information:
•         ISO/IEC 14443 Type A (defines proximity cards used for identification and the transmission protocols for communicating, normal)
•         ISO/IEC 14443 Type B (defines proximity cards used for identification and the transmission protocols for communicating, banking/short range)
•         MIFARE – contactless card standard (and trademark) of Philips (now NXP)
•         FeliCa – contactless card standard (and trademark) of Sony
•         NFC Data Exchange Format (NDEF) – NFC Forum data format

Other standards bodies, alliances and forums with an interest in NFC:
•         Open Mobile Alliance - facilitates the transmission of card and application management commands
•         GlobalPlatform - post-issuance card and application management capability necessary for Over-The-Air (OTA) provisioning
•         European Association for Standardizing Information and Communication Systems (ECMA)
•         International Organization for Standardization (ISO)
•         GSM Association (GSMA) - facilitates a standard connection between SIM cards and NFC chip
•         European Telecommunications Standards Institute (ETSI) - intends to standardize the interface between the SIM and the contactless modem
•         MultiService Forum (MSF)

Use Cases and Applications include:
There are currently three high-level use cases (discussed earlier in my blog):
•         Card emulation: the NFC device behaves like an existing contactless card
•         Reader: the NFC device is active and reads a passive device
•         P2P (peer-to-peer): two NFC devices are communicating together and exchanging information

Applications include:
•         Mobile payment
•         Mobile ticketing in public transport
•         Smart poster
•         Travel cards
•         Identity documents
•         Biometrics
•         Electronic keys replacements for physical keys
•         Bluetooth and Wi-Fi pairing
•         Configure and initiate other wireless network connections

For NFC technology to function more completely in the mobile payments ecosphere, it requires 1) a secure element (SE), i.e. a chip providing additional security, 2) a SIM card (if the mobile device has a SIM card), and 3) an eWallet.

The SE connects to the NFC chip, and depending upon the architecture, may also connect to the applications processor. The SIM card holds information about the mobile device, such as International Mobile Equipment Identity number (IMEI), service-subscriber key (IMSI), phone number and other network specific data.

The “NFC architecture solution” for mobile devices has functionally changed over the past several years as chips and the SIM card have evolved. Although the SIM card is the more general name used, a more encompassing definition for the SIM card is: UICC (Universal Integrated Circuit Card), which is used in GSM and UMTS networks. It contains a microprocessor and stores contacts, enables global roaming, remotely adds new applications and contains other services.

The UICC card is a type of smart card and comes in mini-SIM [25 (L) x 15 (W) x 0.76 (T) mm] and micro-SIM [15 (L) x 12 (W) x 0.76 (T) mm], with the mobile industry moving towards the micro-SIM card size. In a GSM network, the UICC uses a SIM application, for UMTS networks it uses a USIM application, and for CDMA networks it uses a CSIM. The UICC card communicates with the NFC chip and the applications processor (but is architecture dependant).

The eWallet has also increased its functionality and is thought of as a source for advertising, and not just containing personal information for transactions. The eWallet holds the user’s digital versions of their credit cards, debit cards, loyalty cards, coupons and other credentials, and resides in the SE. The eWallet is secured and accessed by a PIN number, similar to how a magnetic stripe debit card is used at a payment terminal.

The secure communications interface between the NFC chip and UICC card is relatively new (and GSMA required) and is called the Single Wire Protocol (SWP). The UICC with a SWP can run a SE application on it, thus eliminating the need for a separate SE chip (however, this is also architecture dependant). For a CDMA only mobile device, a separate SE chip is required.

Another architecture version is to replicate the SE in a removable microSD card which would allow for more flexibility if the user has multiple phones. Different architectures would also mean that the software (SW) and its related functions that assemble the communications link between the hardware (HW) layer and application layer would also require modification.

The diagram in Figure 8 is from the Smartcard Alliance white paper on proximity mobile payments and describes how a SE can be used in both GSM-based and CDMA-based phonesK. To complete the communications within the mobile device, the UICC card and NFC chip use the ISO/IEC 7816 interface to connect to the applications processor, but other interfaces have been used as well.


Source: Smart Card Alliance

Figure 8 – NFC Architectures for Mobile Phones

The eWallet is an application that operates within the SE and contains all the functionality and personal information for a user to make safe and secure mobile payments. Service providers and handset manufacturers, NFC chip suppliers, eWallet application providers and financial entities all want some level of ownership of the eWallet since this is the center for managing payment, billing and advertising activity. ViVOtech offers an eWallet application, called the ViVOwallet, that provides the following functionality and features:

•         Credit and debit payment cards
•         Prepaid (gift), loyalty, membership, discount cards
•         Coupons and discounts
•         Individualized opt-in marketing messaging
•         Tickets (transit, events, movies, etc)
•         Access control cards for corporate campuses, universities, hotel

Besides the eWallet for carriers and handset manufacturers, ViVOtech also offers merchant, issuing bank, ISO (independent sales organizations) and acquiring bank SW solutions, bringing the ecosystem together as a seamless functioning system. VeriFone, Hypercom, Stollman, Gemalto, Oberthur and others, all offer a range of NFC-based SW solutions for mobile payment that cover: the NFC stack SW, eWallet/SE SW, OTA service management SW and financial transaction ecosystem SW.