2011 a 'pivotal year' for NFC payments, say RIM, Orange and KT execs

New NFC smartphones, growing payment ecosystem and industry partnerships should offer big boost to the emerging technology

BARCELONA -- Executives from mobile phone maker Research in Motion and carriers Orange and KT in South Korea today called 2011 the year that smartphone-based Near Field Communication technology will become an important mobile payment technology in many parts of the world.

During a panel discussion at the Mobile World Congress here, the executives cited increasing numbers of smartphones carrying NFC chips that will be shipped this year along with emerging agreements between wireless carriers, payment system providers, retailers and other interested parties.

Research in Motion will ship BlackBerry smartphones with NFC later in 2011, said panelist Andrew Bocking, vice president of handheld software product management at RIM. The BlackBerry NFC chips will run on removable SIM cards to provide security and interoperability among the BlackBerry devices, Bocking added.

Separately, Samsung this week announced plans to add NFC technology to some of its new Galaxy S II smartphones, while Chinese phone maker ZTE disclosed that it will add NFC chips from NXP Semiconductors to its mobile phone devices in the second quarter.

Anne Bouverot, executive vice president of mobile services at French carrier Orange, emphasized the importance of running NFC technology on a SIM card for added security, though she noted that some phones won't take such precautions. Orange won't interoperate with devices that lack SIM cards for monetary payments, but "we will certainly use them" for reading tags on smart posters or interacting with other people, she added.

Orange cooperated with other wireless carriers to create an NFC system in Nice, France, which rolled out last year, using Samsung smartphones in a variety of ways, such as food and train ticket purchases, bicycle rentals and coupon distribution. The project also offers NFC users the ability to learn more about objects, products or services associated with historical landmarks, churches, art galleries and the like, according to a video on the Nice system shown at MWC.

Hyunmi Yang, executive vice president at KT, also showed a video showing how KT workers and others in South Korea can use its Olleh Touch service based on NFC technology. The video showed users using smartphone-based NFC technology to make retail purchases, borrow library books and for other activities.

Reports last month indicated that Apple's next generation iPhone 5 and iPad 2 devices could include NFC capabilities, though the phones likly won't include removable SIM cards. "The iPhone 5 could have an embedded NFC cover" provided by KT to get around the lack of a SIM card, Yang said.

Users of phones without NFC on a SIM could use a read-only NFC sticker as well, which RIM has used in past NFC pilots, Bocking suggested.

But the panelists also noted that since stickers offer simple read-only capabilities rather than instead of two-way read-write communications, a user would need to have different stickers for each NFC reader he or she encounters. "If you run out of room for stickers on a smartphone, you have to buy an iPad," Bouverot said.

Bocking said RIM supports NFC and that "the SIM is a key part of that. The goal is to enable the NFC ecosystem."

But he added that because NFC has taken so long to catch on, it's possible that new NFC applications will emerge that don't rely on SIM cards. One example could be a simple application for exchanging business card information between two phones over NFC rather than infrared, Bluetooth or cellular. No monetary payment system would be involved in such an application so security wouldn't be as important, Bocking said.

The SIM card offers security because carriers can disable it in case a device is lost or stolen. Also, when a person upgrades to another phone, that SIM card can be removed and placed in a new phone.

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