UPDATED 11:47 EDT / NOVEMBER 17 2010

Google Android Rolling Out Near-Field Communications

Yesterday, in some coverage of the Web 2.0 Summit, we spoke about Google CEO Eric Schmidt mentioned the upcoming Android OS, Gingerbread—one element of this new OS will be an API for a new wireless-wallet concept called Near-Field Communications (NFC). In part, this technology has applications beyond financial transactions, but the driving force behind it currently happens to be a wedding between cryptographic communication between handheld devices and stationary devices, whether those happen to be TVs or point-of-sale machines.

The Register put together an excellent description of NFC, along with some long-winded commentary on the technology’s likely implementation and impact,

NFC, or “N-Mark” as it is more properly known (now that “NFC” has become a generic term), consists of three parts: a tag that can be powered and read by induction, a reader that can power and read a similar tag, and a secure element which can store cryptographic secrets in perfect confidentiality. It’s the latter which has proven so political, as Visa and Mastercard aren’t going to stick their secrets into any old RAM, and the backing of such important players has always been seen as essential to the success of any NFC rollout.

Operators, in their arrogance, have tried to have the secure element put into the SIM, while manufacturers have embedded it into the phone and Visa/Mastercard are currently pursuing a removable-media strategy. NFC works no matter where the module is, but taking a build-it-and-they-will-come approach could well make the secure element less important than it initially appears.

Integrated NFC in Android handsets will give Google a huge leap on this socially enabled communication technology. Already we’ve seen Paypal and others working to develop a system by which people could pay for products from their phone; this would codify an implementation that would enable people to do exactly that. One huge barrier, of course, would be for major transaction vendors (Visa, Mastercard, etc.) to give their blessing and place one side of their cryptographic keys onto customers phones (this would go in the secure element.)

The reason why Visa/Mastercard look to the removable-media strategy for the secure element is because, like most banks, they want to be able to manufacture their own access mechanism—in the same way that a person has a swipable credit card. In this fashion, the removable-media would become the new swipe-card, seeded and keyed at the factory and then given to the customer without the fear that a 3rd party could easily intercept the cryptographic key and thus pretend to be the customer.

Financial transactions, however, aren’t the only application that NFC could be leveraged for—the article includes other excellent examples such as social networking and social gaming. In these applications the use of a cryptographic identity wouldn’t be as necessary as the person would just log into their favorite social network and store their identifying information on the secure element and then use that to interact with local technology. Examples of this use might be similar to integration with Facebook Places or Foursquare, enabling them to “Like” a location by tapping their phone on a countertop with a NFC-enabled device within.

Apple also has plans to create NFC-enabled devices, such as embedding it in the next iPhone, along with its own secure element. However, there certainly won’t be any sort of wrangling over where to put that secure element: Apple will choose that.


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