Wednesday, April 27, 2011

Square Gets Strategic Visa Investment

From St. Louis Business Journal

Square Inc., the mobile-payment company founded two years ago by St. Louisans Jim McKelvey and Twitter co-creator Jack Dorsey, said Wednesday that it has received “a strategic investment” from Visa Inc. Using a square-shaped card-reader that plugs into devices running Apple iOS or Google Android, Square’s electronic payment service lets businesses accept credit and debit cards on mobile phones and iPads.  Square said it has been signing up nearly 100,000 new merchants a month this year. Visa President John Partridge said in a statement that with the Square deal “new types of merchants will now be able to accept payment and help grow their business via Visa’s global network…” The deal calls for a Visa executive to join Square’s advisory board.  

Read more: Mobile payment processor Square gets Visa investment | St. Louis Business Journal 

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2Checkout Launches Online Marketplace 2CO Shopping


COLUMBUS, Ohio--(BUSINESS WIRE)--2Checkout.com (2CO), the safe, secure, and convenient online payment platform, today announced the launch of 2CO Shopping, a new online global marketplace, at Shopping.2CO.com.
2CO Shopping is now available, as both a complement to and replacement for existing online storefronts, to 2CO’s 80,000 merchants as well as other merchants looking to expand their reach.2CO Shopping provides a flexible turnkey solution for merchants who want to grow their online businesses. Merchants tired of getting lost in traditional multi-merchant marketplaces will find that 2CO Shopping's buying experience and advanced marketing features, including access to direct marketing campaigns, built-in search engine optimization (SEO) features, and social commerce integrations, help drive more customers to their products.
"We're always looking for ways to level the playing field for small to mid-size merchants competing in a global market, so creating an online marketplace with no listing fees was the next logical step," said Chris Daly, Chief Marketing officer. "With 2CO Shopping's inclusive online marketplace, merchants don't just get listed, they get found."
About 2CO Shopping
2CO Shopping is the new online marketplace from 2Checkout.com. For more information visit http://shopping.2co.com
About 2Checkout.com, Inc.
2Checkout.com (2CO) is a worldwide leader in payment and e-commerce services. 2CO provides web-based businesses merchant accounts, merchant account alternatives and a fully automated suite of back end services, including world-class fraud protection, customer care, shopping cart solutions, data security services, and credit card processing services across multiple payment methods, currencies and languages to optimize conversion. For more information visit http://www.2checkout.com

MasterCard Names Marcie Verdin Group Head, Global Person-to-Person Payments

PURCHASE, N.Y.--(BUSINESS WIRE)--MasterCard Worldwide today announced that Marcie Verdin has been appointed group head, Global Person-to-Person (P2P) Payments, effective immediately.
As group head, Global P2P, Verdin will be responsible for implementing MasterCard’s global P2P strategy, including identifying new and innovative P2P payment and money transfer solutions. Verdin replaces Andrew Ong who has decided to pursue other opportunities outside of MasterCard.
Marcie has more than 20 years of experience in product development, management and marketing. She joined MasterCard in 2005 and most recently served as group head, global commercial products. Over the last few years, she has made significant contributions in helping to develop MasterCard’s commercial product solutions targeted to the large, middle and small business segments. Prior to joining MasterCard, Marcie held positions with Galileo International, VeriSign, Visa, American Express and Accenture.
About MasterCard Worldwide
As a leading global payments company, MasterCard Worldwide prides itself on being at the heart of commerce, helping to make life easier and more efficient for everyone, everywhere. MasterCard serves as a franchisor, processor and advisor to the payments industry, and makes commerce happen by providing a critical economic link among financial institutions, governments, businesses, merchants, and cardholders worldwide. In 2010, $2.7 trillion in gross dollar volume was generated on its products by consumers around the world. Powered by the MasterCard Worldwide Network – the fastest payment processing network in the world – MasterCard processes over 23 billion transactions each year and has the capacity to handle 160 million transactions per hour, with an average network response time of 130 milliseconds and with 99.99 percent reliability. MasterCard advances global commerce through its family of brands, including MasterCard®, Maestro®, and Cirrus®; its suite of core products such as credit, debit, and prepaid; and its innovative platforms and functionalities, such as MasterCard PayPass™ and MasterCard inControl®. MasterCard serves consumers, governments, and businesses in more than 210 countries and territories. For more information, please visit us at www.mastercard.com. Follow us on Twitter: @mastercardnews.

Contacts

MasterCard
Media Relations:
Naya Larsson, 914-249-3916
naya_larsson@mastercard.com
or
Investor Relations:
Barbara Gasper, 914-249-4565
investor_relations@mastercard.com

Paul Turgeon, Debit-Based eCommerce Expert, Moves From Advisor to Full-Time Position at Cardinal Commerce

With Focus on Market Leadership, CardinalCommerce Adds New Executive to Help Drive Strategy

MENTOR, Ohio, April 26, 2011 (GLOBE NEWSWIRE) -- CardinalCommerce, the worldwide leading enabler of payment brands, is pleased to announce the addition of Paul Turgeon, to the Cardinal team. Mr. Turgeon will bring his expertise in banking, financial transaction processing, and authentication to his new role as Vice President, Technology Services. Mr. Turgeon was serving as a Company advisor for the past year.

From his most recent role as President of Payments & Processing Consultants, Inc to his extensive experience in payments processing, including nearly ten years with First Data Corporation and the NYCE payment network, Mr. Turgeon brings with him a wealth of knowledge and know-how to help strengthen Cardinal's product and service offerings for its merchants, issuing banks, and mobile transaction processing Customers. Mr. Turgeon's focus will be to facilitate the growth of Cardinal's bank and financial organization solutions within the online, mobile, and remote payment markets. Mr. Turgeon also serves on the Board of Directors of the Secure Remote Payments Council.

"Since the ecommerce, mobile and remote commerce payment marketplace has expanded to include increased security, authentication, and a variety of payment products, including debit, Cardinal's in the right position at the right time," said Turgeon. "I had a chance to see and work with Cardinal from the inside out and couldn't imagine a better place to be. I'm excited to be part of the team."

Michael A. Keresman, III, President and Chief Executive Officer of CardinalCommerce added, "Mr. Turgeon is a great fit for Cardinal today and, for that matter, he can help accelerate our expansion plans. He understands the industry and will help provide the leadership to support our growth strategies."

About CardinalCommerce

CardinalCommerce Corporation is the global leader in enabling authenticated payments, secure transactions, and alternative payment brands for both eCommerce and mobile commerce.

Cardinal Centinel®* enables payment brands such as Verified by Visa, MasterCard® SecureCode™, Amazon Payments™, Bill Me Later®, ClickandBuy®, Cred-Ex®, Ebates™, eBillme™, eLayaway™, Google™ Checkout, Green Dot® MoneyPak®, Mazooma™, Moneta®, MyECheck, NACHA® Secure Vault Payments (SVP), NYCE SafeDebit ®, OneTouch Online Purchasing™, paysafecard, PayPal™, RevolutionCard™, SafetyPay™, TeleCheck®, Ukash™, and more to a network of thousands of merchants and merchant service providers.

Our mobile commerce platform, Cardinal MAX™, makes it simple for retailers to sell and market products through the mobile channel. Cardinal's proprietary and easily deployable technology provides consumers, merchants, credit/debit card issuers, and processors the ability to conduct authenticated Internet, wireless and mobile transactions safely and securely.

Headquartered in Cleveland, Ohio, with facilities in the United States, Europe, and Africa, Cardinal services a worldwide Customer base.

For more information, visit www.cardinalcommerce.com

Webinar: U.S. Dept. of Justice on Payment Card Fraud Trends and Threats

Webinar - U.S. Dept. of Justice on Payment Card Fraud Trends & Threats
(from Government Information Security on 4-26-2011)
From ATM skimming to the Zeus malware, credit and debit cards are under increased attack by fraudsters, and organizations need to step up their efforts to protect their customers - and themselves. What steps can you take to avoid being the next payment card fraud victim? Join Kimberly Peretti, former senior counsel with the U.S. Dept. of Justice, for her insider's tips on: * Trends in debit and other payment card thefts; * Lessons learned from the TJX, Hannaford and Heartland brea... read more»

SunTrust and MasterCard Introduce Reloadable Prepaid Campus Card Program

Expanded financial capabilities on ID cards offer students greater flexibility, security and convenience when making purchases both on and off campus

ATLANTA and PURCHASE, N.Y.April 27, 2011 /PRNewswire/ --SunTrust Banks, Inc. (NYSE: STI) and MasterCard Worldwide today announced the launch of the SunTrust Campus Card, an innovative product that integrates a student identification (ID) card with a MasterCard reloadable prepaid card.
With this new campus card, universities and colleges will now be able to offer their students access to a reloadable prepaid account to pay for everyday expenses on and, in some instances, off campus, while benefiting from the flexibility and security of a reloadable prepaid card.  In the instance of off campus use, students will be able to use the SunTrust Campus Card to make purchases at millions of locations where MasterCard cards are accepted or withdraw funds without a fee from more than 2,900 SunTrust ATMs. Safer and more convenient than cash, the prepaid card will also provide students greater security and control over their finances.
"The SunTrust Campus Card program offers colleges and universities a simplified way to disburse funds while making the financial lives of their students easier," said Whitney Stewart, Senior Vice President, Senior Payment Strategy Manager, SunTrust Banks. "By linking an ID card with a MasterCard reloadable prepaid card, the SunTrust Campus Card empowers students with a convenient and safe way to pay for expenses and manage funds both on and off campus."
Students and parents can easily add funds to the cards via an online site.  In addition, and in some instances, certain colleges and universities can directly load financial aid disbursements onto the SunTrust Campus Card, replacing the need for paper-based payments.
Providing Access to Funds and a Financial Education
The SunTrust Campus Card program can easily be customized, enabling participating schools to select the desired level of card functionality and the extent of financial access they wish to provide eligible students.
"The SunTrust Campus Card is an excellent example of how a choice in payments makes lives easier while empowering financial responsibility," said Ron Hynes, Group Executive, Global Prepaid Solutions, MasterCard Worldwide. "In research, we received positive feedback from administrators and students on the convenience, control and security of the payment options. Additionally, administrators highlighted the added benefit of enhanced efficiency for their financial disbursement programs."
As part of the program, as currently configured, SunTrust and MasterCard will launch a website for college students and faculty members targeted to teaching financial literacy and featuring budgeting tools and educational materials. Students will also have access to an online site that they can log into for account management, including setting up account alerts (email and SMS). The sites will be launched later this year.
About SunTrust Banks, Inc.
SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation's largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. As of March 31, 2011, SunTrust had total assets of $170.8 billion and total deposits of $124.0 billion. The Company operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states and a full array of technology-based, 24-hour delivery channels. The Company also serves clients in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through various subsidiaries the Company provides mortgage banking, insurance, brokerage, investment management, equipment leasing and investment banking services. SunTrust's Internet address is suntrust.com.
About MasterCard Worldwide
As a leading global payments company, MasterCard Worldwide prides itself on being at the heart of commerce, helping to make life easier and more efficient for everyone, everywhere. MasterCard serves as a franchisor, processor and advisor to the payments industry, and makes commerce happen by providing a critical economic link among financial institutions, governments, businesses, merchants, and cardholders worldwide. In 2010, $2.7 trillion in gross dollar volume was generated on its products by consumers around the world. Powered by the MasterCard Worldwide Network – the fastest payment processing network in the world – MasterCard processes over 23 billion transactions each year and has the capacity to handle 160 million transactions per hour, with an average network response time of 130 milliseconds and with 99.99 percent reliability. MasterCard advances global commerce through its family of brands, including MasterCard®, Maestro®, and Cirrus®; its suite of core products such as credit, debit, and prepaid; and its innovative platforms and functionalities, such as MasterCard PayPass™ and MasterCard inControl®. MasterCard serves consumers, governments, and businesses in more than 210 countries and territories. For more information, please visit us at www.mastercard.com. Follow us on Twitter: @mastercardnews.
SOURCE SunTrust Banks, Inc.

Overdraft Fees on Pace to Eclipse Last Year's 36.5 Billion

A Bank Heist, Committed by the Banks


Read more: http://money.blogs.time.com/2011/04/27/a-bank-heist-committed-by-the-banks/#ixzz1KjfUwGb4


Bank customers don't like fees. Early on during the debate over reforming debit card overdraft programs—in which a customer was charged $30 or $35 for swiping a card that lacked enough funds to cover the bill—a survey was conducted to see how many people would prefer that such a transaction would be declined, so long as no fee was assessed. 80% of debit card holders said they'd rather the card be declined to avoid the fee. Yet somehow, when laws passed mandating that customers be given an explicit choice to opt in or pass on "overdraft protection" services, as they're called, as many as 75% of customers agreed to pay the fees so long as their cards wouldn't be declined. So many people opted in that overdraft fees are on pace to total $38.5 billion in 2011, up from $36.5 billion last year.


Why would bank customers say one thing and do another? Why would such large numbers opt in to programs and fee structures that surveys have shown very few people actually want? One explanation comes via a new survey, which reveals that many customers have no clue what, exactly, they've opted into.

First off, just how many bank customers opted in to overdraft protection is up for debate. Polls have listed figures such as 22%, 30%, 46%, and even 75%. That's a huge range, obviously. Something tells me that the answers may change depending on how the questions are being asked in these polls—lending even more credence to the theory that people are confused by what overdraft protection is, what it does, and even whether or not they've opted in or out.

In a new survey, from the Center for Responsible Lending, the figure rounded up for those opting in to overdraft protection was 33%. Pretty far off from 46%, let alone 75%.

Most disturbing of all is that it sure seems that those who opted in did so based on deceptive information provided by their banks. Here are two key findings:
• Sixty percent (60%) of consumers who opted in stated that an important reason they did so was to avoid a fee if their debit card was declined. In fact, a declined debit card costs consumers nothing.
• Sixty-four percent (64%) of consumers who opted in stated that an important reason they did so was to avoid bouncing paper checks. The truth is that the opt-in rules cover only debit card and ATM transactions.
The majority of account holders opting in to overdraft protection were certainly confused, if not tricked and misled. As a result, the banks reap in billions.


Read more: http://money.blogs.time.com/2011/04/27/a-bank-heist-committed-by-the-banks/#ixzz1KjfAG52J

Visa Releases Mobile Acceptance Best Practices

Establishes security guidelines necessary for ensuring stakeholder trust in mobile acceptance solutions

SAN FRANCISCOApril 27, 2011 /PRNewswire/ -- Visa Inc. (NYSE: V) today released a set of mobile acceptance best practices for merchants, software developers and device manufacturers who are using consumer mobile devices, such as smartphones and tablet computing platforms to facilitate the acceptance of card payments. Visa best practices call for important security considerations such as encryption and tokenization of cardholder data and are designed to foster a better understanding of the merchant and service provider responsibilities related to securing cardholder data when a mobile phone is used as an acceptance device instead of a traditional terminal.  
Mobile technology is enabling a growing number of small and medium-sized merchants to accept payments using mobile devices. As retailers harness the power of mobile technology to accept payments and grow their businesses, the industry must also build in adequate controls and security measures to maintain stakeholder trust in electronic payments.
"Mobile devices that can facilitate acceptance of payments are an important advancement in payments that must balance the promise of an enhanced consumer and retailer shopping experience with enhanced security measures to protect sensitive cardholder information," said Eduardo Perez, head of global payment system risk, Visa Inc. "As a payment technology leader, Visa is well positioned to provide the industry security guidance for emerging acceptance solutions."
Because mobile devices and acceptance attachments today are not designed to the same security requirements as traditional payment terminals, and merchants do not control the security of the network environments to which their acceptance devices connect wirelessly, there are important security considerations above and beyond those for traditional acceptance solutions. These best practices are intended for two distinct audiences – mobile acceptance application and software solution providers as well as merchants who use these solutions. Among the best practices guidance:
  • Encrypt all account data including at the card-reader level and in transmission between the acceptance device and the processor – especially important given the use of wireless or public networks.
  • Enable truncation or tokenization of card numbers, allowing the merchant to identify the cardholder without storing the full account data.


"Building security into the DNA of mobile acceptance solutions is necessary to help grow the channel and encourage innovation," said Bill Gajda, head of global mobile product, Visa Inc. "Providing security guidance to retailers and the industry, as mobile phones used as card acceptance devices are still emerging, will help ensure acceptance solutions are secure, provide a strong foundation for future growth of this channel and foster consumer trust in mobile commerce."
For mobile payments to reach a critical mass, they must work everywhere, every time, with the same reliability of Visa payments today. For more than 50 years, Visa has set a high bar for robust security, privacy protections, and guaranteed payment to merchants and global acceptance ubiquity. Merchants, consumers and financial institutions should expect the same standards for mobile acceptance solutions.
A complete version of Visa's Best Practices for Mobile Payment Acceptance Practices may be found online at www.visa.com/cisp. An abbreviated version is provided below.
Best Practices for Vendors:

Goal
Best Practice
Design and implement secure mobile payment acceptance solutions.
  1. Provide payment acceptance applications and any associated updates in a secure manner with a known chain of trust.
  2. Develop mobile payment acceptance applications based on secure coding guidelines.
  3. Protect encryption keys that secure account data against disclosure and misuse in accordance with industry-accepted standards.
Ensure the secure use of mobile payment acceptance solutions.
  1. Provide the ability to disable the mobile payment acceptance solution.
  2. Provide functionality to track use and key activities within the mobile payment acceptance solution.
Limit exposure of account data that could be used to commit fraud.
  1. Provide the ability to encrypt all public transmission of account data.
  2. Ensure that account data electronically read from a payment card is protected against fraudulent use by unauthorized applications in a consumer mobile device.
  3. Provide the ability to truncate or tokenize the Primary Account Number (PAN) after authorization to facilitate cardholder identification by the merchant.
  4. Protect stored PAN data and/or sensitive authentication data.


Best Practices for Merchants:

Goal
Best Practice
Ensure the secure use of mobile payment acceptance solutions.
  1. Only use mobile payment acceptance solutions as originally intended by an acquiring bank and solution provider.
Limit the exposure of account data that may be used to commit fraud.
  1. Limit access to the mobile payment acceptance solution.
  2. Immediately report the loss or theft of a consumer mobile device and/or hardware accessory.
Prevent software attacks on consumer mobile devices.
  1. Install software only from trusted sources.
  2. Protect the consumer mobile device from malware.


This is the first version of these best practices to support the growth of the emerging mobile acceptance solutions. Visa will continue to refine and update the best practices based on industry feedback.
Beyond the best practices, vendors, merchants and acquirers are expected to follow all Visa requirements for magnetic stripe, chip and contactless acceptance. They should also adhere to the Payment Card Industry Data Security Standard (PCI DSS) and Payment Application Data Security Standards (PA-DSS). Additionally, on top of following Visa Operating Regulations, acquirers must also be in compliance with all local laws and regulations regarding sponsored merchants, including adequate Know Your Customer (KYC) and Anti-Money Laundering (AML) due diligence.
About Visa Inc.: Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks – VisaNet – that is capable of handling more than 10,000 transactions a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank, and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: Pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com.
SOURCE Visa Inc.

Visa Challenges Industries to Use More Intelligent Solutions to Combat Fraud, Stay Ahead of Criminals

Visa Security Summit Focuses on Success in Reducing Fraud and Need for Ongoing Investment to Maintain Momentum

WASHINGTONApril 27, 2011 /PRNewswire/ -- Visa Inc. (NYSE: V) opened its fourth Global Security Summit today with a keynote address by chief enterprise risk officer Ellen Richey, in which she applauded the collective progress in making electronic payments more secure from criminals. While acknowledging this important success – achieved through closer industry cooperation, coordination with law enforcement and technological advancements – Richey also warned of future challenges that will require all stakeholders to more rapidly adopt "smarter" technologies and better application of risk-management intelligence.
"Visa's global fraud rate recently hit a historic low – at just over 5 cents for every $100 transacted, down more than two-thirds from the levels of 20 years ago, and more than 99 percent of large merchants have confirmed they do not store sensitive cardholder data," Richey told an audience of more than 500 business, government, academic and law enforcement officials from around the world. "Today, payment card data is more secure; data compromises, when they do occur, are better managed; and technology advancements have aided in preventing fraud."
But despite progress, Richey highlighted several challenges ahead, including persistent and negative consumer perceptions about data security. According to a recent Visa survey in the U.S., Canada and Brazil, consumers rank identity theft and counterfeiting as top concerns when using credit cards, ahead of debt accumulation. Richey said 61 percent of consumers believe criminals are ahead of the payment industry when it comes to fraud.
To combat both real and perceived threats, Richey challenged Security Summit attendees to broaden their use of "smarter" strategies that are proven to be effective at reducing fraud. She outlined a three-pronged approach for the industry to follow in the future, including:
  • Expanding investments in, and use of, smart devices, such as EMV chip cards;
  • Making networks smarter; making better use of the information available today;
  • Adopting smarter cardholder authentication methods, such as two-factor authentication.

The event will also include a panel session that explores the impact of recent legislation proposed by U.S. Senator Richard Durbin(D-Ill.), which Richey says "has the potential to chill investment in security or even undermine today's consumer protections."  
The effectiveness of cross-industry collaboration in stemming the tide will be tested by a live data breach simulation moderated during the Summit by former CIA and NSA director Gen. Michael V. Hayden. The exercise will offer a glimpse into how merchants, law enforcement, financial institutions, government and other parties respond to data compromises in order to protect consumer information and stem financial losses.
Michael Chertoff, former secretary of the U.S. Department of Homeland Security and founder of The Chertoff Group, will provide a keynote address to the Summit audience. He is expected to call on the private and public sectors to coordinate in the fight against cybercrimes and to continue to make security investments a priority.
Following her keynote remarks, Richey presented the inaugural Visa Leadership in Security Awards. The first award honored the accomplishments of former U.S. Department of Justice prosecutor Kim Peretti for her efforts in securing a historic 20-year prison sentence for Albert Gonzalez, the notorious cybercriminal behind the world's largest card compromises. Also honored was the National Collegiate Cyber Defense Competition (NCCDC) in recognition of its efforts to promote computer security curricula.University of Washington student Alexei Czeskis, who was captain of the cyber team that won the NCCDC's 2011 competition, accepted the award on behalf of NCCDC.
Visa's fourth Global Security Summit was convened to discuss how payments system participants can collaborate to protect cardholders against current and emerging security threats. Five panels were assembled to cover timely topics relevant to securing payments. Panels included: the rise and fall of criminal mastermind Albert Gonzalez; managing eCommerce fraud challenges; the impact of the Durbin Amendment on security innovation; EMV chip and dynamic authentication; and securing the future of mobile commerce.
A live webcast of the Summit can be viewed today at www.visasecuritysummit.com. Recorded video will be available later this afternoon.
About Visa Inc.: Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks – VisaNet – that is capable of handling more than 10,000 transactions a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank, and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: Pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com.
SOURCE Visa Inc.

NFC in Phones: What you Need to Know

Explained: NFC is coming to your phone - but what can you do with it?
By Matt Bolton - Tech Radar Online
Near-field communications (NFC) is a technology that's getting a lot of coverage recently, thanks to its inclusion in the Google Nexus S and rumours that it'll be present in the iPhone 5. 
And one in five smartphones will feature NFC tech by 2014, according to forecasts by Juniper ResearchBut what is it, and what's it good for?


The first thing to know is that NFC is actually not new tech. It's an evolution of the radio-frequency identification (RFID) technology, which has been used for years as the basis for the London Underground's Oyster cards, where you simply tap your Oyster card on a pad to pay for your journey.

NFC extends the capabilities of RFID, though it's still compatible with the older technology, and should be able to do more than just take payments. NFC's development is overseen to a degree by the NFC Forum, which publishes specifications and has developed a certification scheme for ensuring that different NFC devices work with one another.

The Forum's members include lots of electronics manufacturers, as well as most major mobile operating systems, including Android, Symbian and RIM (in case you're wondering, Apple isn't on the list, and NFC Forum director Debbie Arnold says the organisation is "keeping an eye out" for the iPhone manufacturer, but declined to comment on whether there had been any contact already).

Uses for NFC

There are three different use cases for NFC, which Debbie Arnold describes as "sharing", "pairing" and "transactions". Technically, these are known as "reader/writer", "peer-to-peer" and "card emulation" respectively.

For "sharing", connections between NFC devices always work in the same way: one acts as the reader, while the other is the writer. The reader will be powered, and produces a small (typically 4cm at most) radio frequency (RF) field that activates the writer, which then sends it information. The RF field alone is enough to power the NFC capabilities of the writer, which enables it to be placed in something as small or thin as an Oyster card, which has no battery of its own.

Smart Poster is the name given by the NFC Forum to small writer RF tags, which Arnold says can be embedded "almost anywhere, from a magazine to a poster or a statue, or on the wall". You can then tap this with an NFC device, such as a suitably equipped phone, and see whatever information has been included. It could be a short description of what you're looking at, or a film poster could give you the showing times at your local cinema and directions to it, or an advert in a magazine might give you a coupon.

It could have more important uses, too. Arnold gives the example of a prescription bottle with more safety and usage information available using an embedded Smart Poster than you could fit on the label.

With two powered devices, peer-to-peer data transfer similar to Bluetooth is possible. Although it's slower than Bluetooth and has a much more limited range, it consumes less power. There are also no set-up passwords or codes required, as there is with Bluetooth and secure Wi-Fi. You could simply place your digital camera next to your TV to send photos across for viewing.

Because of this, one of the possibilities for NFC use is as a way for devices to 'handshake' as a way of accepting another type of connection. For example, it could actually replace the set-up hassles when pairing two Bluetooth devices. They would need to be placed close enough for the NFC to register first, but could then be moved away to normal Bluetooth distances once the connection was established.

Many wireless routers come with a card with the WEP/WPA code on it for reference, but this could be NFC-equipped, meaning you would only need to tap your new computer/phone/laptop with it to connect securely.

Contactless payment in phones

All of these extended uses for NFC could be very useful, but contactless payment is what's really hitting the headlines.

Barclays already uses debit cards with what it calls 'contactless technology' built in, in conjunction with Visa. It enables people to pay for items less than £15 simply by placing their card on or near a payment pad.

While incorporating NFC in debit cards is one way to ensure wide distribution of the technology, it doesn't make the most of some of the other features it's capable of. When paying with a phone, you could not only pay, but receive plenty of information digitally in return.

Arnold says that users can make a payment, and in the same simple tap receive back "coupons, receipts, loyalty points and warranty programs". It could save customers time, and retailers money and resources.

Those coupons could also be very targeted, since the retailer will know what you buy and how often. This system is already in place with many loyalty card schemes, but the process could be streamlined. Of course, with this kind of focussed data collation, we're getting into the realm of arguably NFC's most high-profile supporter so far…

Google and NFC

Google declined to talk about concrete plans regarding NFC for this article, confirming to TechRadar that its inclusion in the Google Nexus S phone was more a case of future-proofing than part of an immediate strategy.

However, at the Web 2.0 summit in 2010, Google's Eric Schmidt actually demonstrated using NFC as a way to get information on a place by tapping a phone against a special Google-branded location card, negating the need to search manually.

He also talked up the ability of phones to act as a payment system when equipped by NFC. Google told us that this can be considered a guide to where the search giant hopes to see the technology go in the near future.

"We think the overall mobile market, which is already extraordinarily excited about these payment systems, will benefit from having [NFC]," Schmidt explained.

"One way to think about it is that this could replace your credit card," he added.

Mobile phones - and smartphones more recently - have become the ubiquitous accessory of our lives. If payment technology can be built into them, would a wallet with cards even be necessary any more?

Samsung and Visa have teamed up to raise awareness of this possibility with a high-profile distribution of NFC-capable phones to the Olympic and Paralympic athletes at the London 2012 games. The phones are also set to be released to the general public as well, and it's clear that Samsung - as an early innovator of the technology - is hoping to be at the forefront of any wider uptake.

"We regard the greatest show on earth as the perfect opportunity to showcase how this technology can make a positive difference to people's lives," said Seokpil Kim, president and CEO of Samsung Electronics Europe.

NFC security

Of course, the obvious question to ask about payment where you simply pass your phone or card over a receiver regards security.

There have been concerns that NFC would be vulnerable to people wandering around with a reader device, making unwanted transactions for anyone who walks past, or that a stolen card wouldn't even need a matching PIN for the thief to use it.

The first of these scenarios is combated partly by the short-range nature of NFC - you can't simply scan a room as you could with Wi-Fi. You still need to effectively touch against whatever device holds the information.

Barclays details a few methods designed to combat the second concern above, including that £15 transaction limit, which means that a thief couldn't simply empty your account in one go.

"Where you're going to see security, especially from the payment world, is in that payment application itself," says Debbie Arnold. This bears out in Barclays' system, in which the payment machine will ask for a PIN to be entered if your card is used several times in a row. To a degree, NFC could be considered a dumb connection, and the security needs to be integrated into the software that surrounds it.

The usual fraud cover that's offered by other payment systems is also in place, meaning that you won't be liable for any fraudulent transaction provided you've acted with reasonable care.

"The reason this NFC chip is so interesting is because the credit card industry thinks that the loss rate's going to be much [lower]," Eric Schmidt says.

Continuing that thought, Arnold details one particular reason why NFC integrated into phones could actually offer greater security: "Today, if you lose a card you're not liable because of the business rules around it, but somebody can still go around and make transactions either under the [£15] limit or in offline terminals, and the bank has to eat that fraud. Today, if you lose your phone, not only might you have password protection on it, but also the operator can turn it off instantly. So you have double protection if you have a phone with a payment application on it."

Services like Apple's Find My iPhone and HTC's Sense.com can also wipe phones remotely, meaning you could immediately render your phone useless as a payment device yourself when you notice it's missing.

Certainly, it would be a boon for consumers if the technology did prove to be more secure in the long run, as well as convenient. When it comes to introducing a new payment technology, we can't help but think of the resistance to bringing in chip-and-PIN from some quarters, but NFC-based payments look set to be purely optional for the foreseeable future, so may have a smoother introduction.

In any case, with the likes of Google, Samsung, Barclays and Visa behind it, it's likely that NFC will find its way into your pocket before too long, one way or another.


Read more: http://www.techradar.com/news/phone-and-communications/nfc-in-phones-what-you-need-to-know-948410#ixzz1KjVsVNRg

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